World Economic Situation and Prospects as of Mid-2008
June 2008, New York.
Coming in the wake of global financial turmoil, the mid-year update of the World Economic Situation and Prospects forecasts a deeper downturn in the global economy in 2008.
The Report warns that in the absence of aggressive and coordinated expansionary policies a more severe contraction will occur, which could trigger a disorderly unwinding of the massive global imbalances and have drastic implications for global trade and finance. It also discusses the steep rise in food and energy costs and warns against the social and political risks associated with the unfolding food crisis.
To address the economic malaise, the Report recommends the following: a multilaterally co-ordinated stimulus package centered on the expansion of domestic demand in surplus countries, while staying within existing fiscal capacity; deep reforms in mechanisms of international financial regulation and supervision; and meeting emergency food needs, while setting longer term strategies for alleviating supply constraints and improving food security.