World Economic Situation and Prospects as of mid-2019

Global growth outlook has weakened, amid unresolved trade tensions and elevated international policy uncertainty, according to the World Economic Situation and Prospects as of mid-2019. Across both developed and developing countries, growth projections for 2019 have been downgraded. Following an expansion of 3.0 per cent in 2018, world gross product growth is now projected to moderate to 2.7 per cent in 2019 and 2.9 per cent in 2020, reflecting a downward revision from the forecasts released in January. The report identifies several downside risks that could trigger a sharper or more prolonged growth slowdown in the world economy, potentially inflicting significant damage on development progress. These risks include a further escalation in trade disputes, a sudden deterioration in financial conditions, and the accelerating effects of climate change. Tackling the current growth slowdown and placing the world economy on a robust path in support of the 2030 Agenda for Sustainable Development require more comprehensive and well-targeted policy responses, including a combination of monetary, fiscal and development-oriented measures.

The increase in frequency and intensity of natural disasters highlight the rising threats from climate change, particularly for the most vulnerable economies. The report calls for a stronger and more coordinated multilateral approach to global climate policy, which includes the use of carbon pricing mechanisms. A price on carbon compels economic decisionmakers to internalize some of the environmental costs of their consumption and production.

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