A massive and coherent economic stimulus must take place soon to counter the global economic downturn, according to a report by UN experts published today.
The UN called for 'massive economic stimulus packages that are coherent and mutually reinforcing on a global basis, and linked with sustainable development imperatives' in its Report on World Economic Situation and Prospects 2009 presented at an international ministerial conference on development financing in Doha.
The packages 'should come on top of the liquidity and recapitalisation measures already undertaken by countries in response to the economic crisis,' the report added.
UN economists also proposed 'stronger regulation of financial markets and institutions, adequate international liquidity provisioning, an overhaul of the international reserve system and a more inclusive and effective global economic governance, to prevent against any future repetition.'
The report made dire projections for economic growth across the globe in 2009, with an overall drop in per capita income and developed nations most affected by the global financial crisis. Developed countries will see a 0.5% decline in output, compared with an average growth of 5.3% in transition economies and 4.6% in developing countries.
World growth will most likely not exceed one percent in 2009, compared to 2.5% in 2008 and rates varying between 3.5% and 4% in the four previous years.
US growth will decline by 1%, with the euro zone declining by 0.7% and Japan by 0.3%. Growth in India, Brazil and Mexico is slated at 7%, 2.9% and 0.7%, respectively.
The US has already launched an economic recovery plan worth $700 billion and China, the world's fourth-largest economy, has initiated an unprecedented $590 stimulus package.
