GENEVA — World output is forecast to grow by 3 percent in 2014, up from this year’s weak 2.1 expansion, spurred by “continuing improvements” led by stronger growth in the United States, and an end to the protracted euro zone recession, a U.N. report published Wednesday predicts.
Growth in global trade is also expected to expand next year by 4.7 percent, up from this year’s 2.3 percent.
U.N. economists estimate growth in the U.S. will increase in 2014 by 2.5 percent, up from 1.6 percent expected for this year, and in the Euro area to increase next year by 1.1 percent, up from this year’s 0.5 percent contraction.
With regards to the U.S., the study, “World Economic Situation and Prospects 2014,” compiled by seven U.N. economic agencies, expect the “future unwinding of the monetary easing will be smooth.”
But it also warns of possible downside risks.
“Our forecast is made in the context of many uncertainties and risks coming from possible policy missteps as well as non-economic factors that could stymie growth,” said Shamshad Akhtar, U.N. assistant secretary-general for economic development.
On the U.S., the report concludes, “Risks remain on the downside,however, particularly because wrangling over the budget may linger for several years.”
Similarly, it warns, “international capital flows to emerging economies are expected to become more volatile.
For major emerging economies with large textiles and apparel exporting sectors — such as China and India, the U.N. expects growth in China next year to slow to 7.5 percent, a slightly lower pace than this year’s 7.7 percent increase, and for India to post an increase in growth of of 5.3, up from 4.8 percent expected for this year.
Concerning other key indicators, the U.N. report expects inflation will remain tame worldwide, but the employment situation will continue to be challenging.
In the U.S., inflation is expected to remain below 2 percent in 2014 and below 1 percent in the Euro area, it said.
It also projects most primary commodities to be flat but adds any unexpected supply shocks, including geopolitical tensions could push prices higher.