World export growth is projected to increase, to about 8 percent in 2000, up from 4.8 percent in 1999 and 3.3 percent in 1998, according to the UN World Economic and Social Survey 2000, released on July 5 at the opening of the UN Economic and Social Council. This post–Asian crisis rebound has a good chance of continuing for years to come, the report explains. An important long-term force behind the current expansion is the dynamism of information and communications technologies. While growth has been widespread, however, it has not been universal.
Forecasting that gross world product would grow to 3.5 percent in 2000, from 2.7 percent in 1999, the report says that the developed economies have led the current economic upturn. The United States is enjoying its longest period of continued economic expansion—109 months in a row—combined with low inflation and low unemployment. Economic expansion in the European Union has also been gathering momentum since the second half of 1999, driven by exports and stronger domestic demand. The Japanese economy, in contrast, remains sluggish, and its GDP is expected to expand by only 1 percent in 2000.
The outlook for most developing economies has become more upbeat, according to the UN report. South and East Asian developing economies are expected to grow by 6!/2 percent in 2000–01, and the report expects a rebound in Latin America and the Caribbean. Africa’s GDP overall is expected to increase by 4!/2 percent in 2000, although country performances vary widely. In the Baltics and Central and Eastern Europe, recent developments have been positive, and growth is expected to be 3#/4 percent in 2000. Russia’s macroeconomic performance was better than anticipated throughout much of 1999, and its economy is expected to grow by 4 percent in 2000–01.
The outlook for economic growth is positive, the report says, but “several caveats need to be taken into account.”
The economic recovery in countries hit by the financial crisis and prolonged growth in several developed countries are accompanied by a legacy of large fiscal and current account imbalances in some countries that need to be lowered, and in some cases reversed, in the medium to long run. Critical among these are the large U.S. trade deficit and considerable fiscal deficits in Japan and several emerging market economies.
Policymakers in most developing countries are...