A UN report has said that developing countries and economies in transition would continue to stoke the engine of the world economy It, however, said their growth in 2012 and 2013 would be below what they achieved in 2010 and 2011.
Dr Adam Elhiraika, Chief, Macroeconomic Analysis Section, UN Economic Commission for Africa who presented the World Economic Situation and Prospects 2012 report in Addis Ababa said though economic ties among developing countries have strengthened, they remained vulnerable to economic conditions in the developed economies.
He said from the second quarter of 2011 economic growth in most developing countries and in transition have started to slow notably. “Among the major developing countries, growth in China and India is expected to remain robust. In China, the growth is projected to slow to below nine per cent in 2012 and 2013, while India is expected to grow by between 7.7 per cent and 7.9 per cent’’, he said.
Elhiraika said the report also showed that Brazil and Mexico were projected to suffer a more visible economic slowdown and that the low-income countries have also seen a mild slowdown. He said the report further showed that in per capita terms, income growth slowed from 3.8 per cent in 2010 to 3.5 per cent in 2011, and that despite the global slowdown, the poorer countries might witness average income growth in 2012 and 2013.
Elhiraika said in 2006, the growth of emerging countries was 4.1 per cent, it slightly went down to 4.0 per cent in 2007, in 2008 it went down to 1.5 per cent, it went up slightly to 2.4 per cent in 2009, had a dramatic change to 4.0 per cent in 2010 before it went down to 2.8 per cent because of global economic crises in 2011.
He said in 2012 the global economy have been focused to be between 0.5 per cent to 2.6 per cent and 3.9 per cent, while in 2013 it would be between 2.2 per cent to 3.2 per cent and 4.0 per cent based on pessimistic and optimistic views. Elhiraika said the report also envisaged a downsize risk as severe global slowdown would affect growth in Africa, and that adverse weather condition would reduce agricultural production, thereby creating food shortages.
He said the report also identified food and oil prices, which would remain volatile, slow post-recession employment recovery, sovereign debt distress in Europe and volatility of fluctuation in currencies as other factors that may affect the global economy in 2012 and 2013. The report said Nigeria’s GDP growth would rise to 6.5 per cent, South Africa would be 3.8 per cent, Algeria would be 4.3 per cent, while Egypt’s GDP was focused to grow from less than one per cent to 4.0 per cent in 2012. It also stated that five of the top 10 growing economies in the world for 2011 were from Africa.
It added that more severe global showdown would affect Africa and that the outcome of the ongoing economic crises in Europe would have a serious effect on the global economy either negatively or positively depending on the outcome of the ongoing efforts by Germany to save the situation.