October 11, 2002	Friday	Sha'aban 4, 1423

UNITED NATIONS, Oct 10: Predicting an “anemic” economic growth, a United Nations report said that the declining US stock prices, economic turmoil in Latin America and uncertainty in the Middle East will delay the global economic recovery until at least the middle of next year.

In the Global Economic Outlook issued on Wednesday, the experts predicted economic growth of just 1.7 per cent this year and 2.9 per cent next year — down from April’s forecast of 1.8 per cent and 3.2 per cent, respectively.

It forecast 2.3 per cent economic growth in the United States this year and 3.2 per cent in 2003.

Economists from around the world predicted in April that the global economic recovery would reach full momentum in the second half of this year.

But the new report forecasts that peak economic recovery will not occur until around mid-2003.

“Not only that, the sustainability of the ongoing recovery remains subject to a number of uncertainties,” it said.

The rising “geopolitical tensions” in the Middle East are an economic wild card, the decline of US stock prices is of historic dimensions in terms of duration and severity, and the financial crisis in Argentina has spilled into Latin America, the forecast said.

Corporate scandals also are increasing in industrialized countries, especially the United States, the forecast said.

Economic recovery in Japan and Western Europe “will remain fragile,” with the Japanese economy “dragged down by fiscal and debt difficulties” and European economies constrained by fiscal and monetary policies.

In west Asia, economic growth is subject to great uncertainty because of the increased volatility in oil prices and mounting geopolitical tensions, the report said.

China remains the top performing economy, with expected growth of 7.7 per cent this year and 7.5 per cent next year, it said.

The Mideast turmoil triggered an increase in oil prices of more than 50 per cent from January through September, adding to economic problems in many countries, it said.

“These new factors, plus the havoc wreaked by unusually large natural disasters such as floods and drought in a number of economies, have exacerbated the original weaknesses in the world economy,” the economists said.

“In fact, in mid-2002 these developments almost aborted the tentative recovery.”

The economists warned that a prolonged continuation of the stock market slide in the United States could push the global recovery to beyond mid-2003.

The Global Economic Outlook is based on submissions by economists ahead of this week’s meeting in Bologna, Italy, of Project LINK, a non-governmental research effort coordinated by the UN Department of Economic and Social Affairs and the University of Toronto.