UN economists fear 2nd recession of global economy

United Nations, Dec 2 (ANI): The global economy is at a risk of facing another major downturn, a report has suggested.

The 2012 World Economic Situation and Prospects (WESP) report, which complied by UN economists, said 2012 would be crucial in shaping the economic future.

"The situation in the world is rather grim. We have a situation where we may well be at risk of a double dip. In any case, it is very likely that there will be further slowdown," UN Assistant Secretary-General Jomo Kwame Sundaram said.

The report predicted three possible scenarios for the global economy in future: a baseline projection, as well as optimistic and pessimistic projections.

It predicted that developing nations, expanding by 5.4 percent in 2012 and 5.8 percent in 2013, would be major drivers of growth, Xinhua reports

These figures, however, indicate a slowdown from earlier growth figures.

The report also said high unemployment, particularly in developed countries, is adversely affecting growth, and added fiscal austerity measures that have been passed in response to high public debt in developed countries were partly responsible for the cause.

The report said additional fiscal stimulus could help counter the crisis.

"If there's no more fiscal stimulus there's no other factor that will keep up the demand, particularly in developed countries, " Sundaram said, adding that without stimulus, unemployment may grow and economic growth may decrease, which would only make national debt problems worse.

The report calls on countries to effectively coordinate their efforts to counter global economic problems. (ANI)