Assistant Secretary-General for Economic Development, Department of Economic and Social Affairs

Launch of World Economic Situation and Prospects as of mid-2017

Delivered by Ms. Diana Alarcon, Chief, Development Strategy and Policy Analysis (DSP) Development Policy and Analysis Division (DPAD)

Good morning,

Thank you joining us for a discussion on the state of the world economy, as of mid-2017. The report presented today updates forecasts from the UN flagship publication World Economic Situation and Prospects 2017, which was released in January.

The report confirms that at the global level economic growth has strengthened in recent months, in line with the forecasts presented in January. Industrial production has picked up, world trade is reviving, and economic sentiment has generally improved. World gross product is expected to expand by 2.7 per cent in 2017 and 2.9 per cent in 2018, unchanged from the previous forecast.

However, the modest strengthening of economic activity has not been evenly spread across countries. We are seeing a general uptick in growth in many of the large developed economies, improved prospects in many economies in transition, and continued robust growth in East and South Asia. However, the strength of recovery remains insufficient in many regions for rapid progress towards achieving the Sustainable Development Goals. For example, average incomes in several parts of Africa and in South America actually declined last year, and are projected to increase only slightly in 2017 and 2018.

Of particular concern is the deterioration of prospects for some of the world’s poorest countries. Average GDP growth projections for many of the least developed countries have been revised downward. GDP for this group as a whole is expected to rise by just 4.7 per cent in 2017 and 5.3 per cent in 2018, significantly below the SDG target of at least 7 per cent.

The report warns that under the current growth trajectory, without a decline in income inequality, nearly 35 per cent of the population in LDCs may remain in extreme poverty by 2030. “Ending poverty in all its forms” in the current economic environment will require countries to tackle inequality issues more rigorously, including commitments to share prosperity both within and across national borders.

The report also highlights the high degree of uncertainty in the international policy environment, which continues to cloud the outlook, and heightens uncertainty around prospects for world trade, development aid and climate targets.

We aim to realize a world where every country enjoys sustained, inclusive and sustainable economic growth and decent work for all. To meet these ambitious Goals, countries will need to reinvigorate global commitments to international policy coordination to achieve a balanced and sustained revival of global growth, ensuring that no regions are left behind.

Thank you.

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