Weak Global Growth to Continue Through 2016 – UN

1717 Views Kampala, Uganda

In short
The report, launched today by the UN World Economic Situation and Prospects, says world gross product will grow by just 2.4 per cent in 2016, the same pace as in 2015. This would rise marginally to 2.8 percent in 2017.

A new United Nations report says global economic growth continues to be subdued with little prospect for turnaround this year.

The report, launched today by the UN World Economic Situation and Prospects, says world gross product will grow by just 2.4 per cent in 2016, the same pace as in 2015. This would rise marginally to 2.8 percent in 2017.

In December 2015, the UN had forecast that global economic growth would be slow but at 2.9 percent.

According to the report, persistent weakness in aggregate demand in developed economies remains a drag on global growth.

At the same time low commodity prices, mounting fiscal and current account imbalances and policy tightening have further dampened prospects for many commodity-exporting economies in Africa, the Commonwealth of Independent States, Latin America and the Caribbean.

The report adds that the problem has been compounded by severe weather-related shocks, political challenges and large capital outflows in many developing regions.

Speaking at the launch at United Nations Headquarters in New York, Lenni Montiel, Assistant Secretary-General in the United Nations Department of Economic and Social Affairs (DESA) said the report underscores the need for a more balanced policy mix to rejuvenate global growth and create an enabling environment to achieve the 2030 Agenda for Sustainable Development.
 //Cue in; "The bleak state
Cue out……past few months."//
Although the 2.4 percent growth is the global average, the report points out that GDP growth in the least developed countries is forecast to reach just 4.8 per cent in 2016 and 5.5 per cent in 2017, well below the Sustainable Development Goal target of "at least 7 per cent GDP growth.

The report recommends that a more balanced policy mix, supported by robust fiscal policy stances coordinated by the largest economies, could provide much needed impetus to the world economy.

Between March 21 and April 6, a team from the International Monetary Fund (IMF) led by Roger Nord, IMF Mission Chief and Deputy Director of the African Department, visited Kampala to April 6, to conduct the sixth review of Uganda's economic program.
At the end of the mission, Nord issued a statement in which he said in a complex global, regional, and domestic environment, affected by election-related uncertainties, Uganda's economy continued to perform well.

 He said economic growth is expected to reach 5 percent in the current fiscal year and accelerate to 5.5 percent in 2016/17 financial year, supported by the scaling up of infrastructure investment.

Nord's statement added that the 2016/17 budget, which envisages a continued scaling-up of infrastructure investment, need to be tied to continuing building of capacity and controls to manage large public investment projects.

The IMF also welcomed the decision by the Bank of Uganda (BOU) to lower the central bank rate, consistent with the forecast of core inflation returning to its medium-term target.

Meanwhile the IMF in its In its 2016 Regional Economic Outlook for Sub-Saharan Africa said President Museveni's dream of transiting Uganda into a low-middle income country by 2020 is unrealistic. The IMF said Uganda, like other Sub-Saharan countries, will experience a second difficult year as the region grapples with multiple shocks including low global commodity prices.

The report projects Sub-Saharan Africa growth to fall to an average of three percent in 2016, the lowest in 15 years.

At five percent growth it means Uganda will still perform better than her Sub-Saharan peers, although it would still be lower than the initial projection of over six percent.


About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.

In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.

I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."