World economy to witness downturn

UNITED NATIONS, OCT. 11. The world economy will witness a downturn with a greatly hampered long term growth as a result of the September 11 terror strikes in the U.S., a new United Nations report has said. The developing countries in East and South Asia are forecast to be greatest sufferers with the world body revising substantially downwards the GDP growth projection from 4.1 to 1.3 per cent for the current year.

The growth rate in Africa is expected to drop from 4.3 to 3 per cent and in Latin America from 3.1 to 0.8 per cent.The West Asian nations are projected to see a growth rate of 1.9 per cent instead of earlier forecast of 2.6 per cent.

But China is expected to remain virtually untouched by the current crisis and post a growth rate of 7.5 per cent, same as forecast before the attacks on the U.S.

The report forecast U.S. economy, the world's largest, to grow only at one per cent against 1.8 per cent forecast earlier, thus posting a negative growth rate in the second half of the current year. The European Union will, according to the report, see a growth of 1.8 per cent down from 2.7 per cent and the Japanese economy will shrink 0.5 per cent down from earlier forecast of a growth of 0.7 per cent.

Overall, the world economic growth will be down full one percentage point to 1.4 from the earlier projection of 2.4.

For the next year, the report expects the world economy to recover but slowly, and it projects growth rate of 2 per cent down from pre-September 11 projection of 3 per cent.

- PTI

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