World Economic Situation and Prospects (WESP) is a joint product of the Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five United Nations regional commissions. It provides an overview of recent global economic performance and short-term prospects for the world economy and of some key global economic policy and development issues. One of its purposes is to serve as a point of reference for discussions on economic, social and related issues taking place in various United Nations entities during the year.

  World Economic Situation and Prospects 2008

According to WESP 2008 midyear update the global economy is teetering on the brink of a severe economic downturn leading to a downward revision in the baseline forecast for world economic growth in line with the pessimistic scenario of the World Economic Situation and Prospects 2008 published in January. The deepening credit crisis in major developed market economies, as triggered by the continuing housing slump, the declining value of the United States dollar vis-a-vis other major currencies, persisting global imbalances, and the soaring oil and non-oil commodity prices are slowing growth of the global economy.

   The report also warns that in the absence of aggressive and coordinated expansionary policies a more pessimistic scenario will occur, which could trigger a disorderly unwinding of the massive global imbalances and have drastic implications for global trade and finance. In addition, the steep rise in food and energy costs is compounding the downside risks, particularly in view of the unfolding food crisis, which poses a threat to social and political stability.

   The report recommends a multilaterally coordinated stimulus package centered on the expansion of domestic demand in surplus countries, while staying within existing fiscal capacity; deep reforms in mechanisms of international financial regulation and supervision; and meeting emergency food needs, while setting longer term strategies for alleviating supply constraints and improving food security.

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(For more info, email: wesp@un.org)