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United Nations • The world economy stumbled in 2015, with growth estimated at just 2.4 percent this year following a nearly 60 percent drop in oil prices and an over 20 percent fall in commodity prices in the last 18 months, according to a U.N. report released Thursday.
The report on the World Economic Situation and Prospects 2016 said many developing and former Soviet bloc countries suffered a broad slowdown to the weakest pace since the global financial crisis in 2008. The growth rate compares to 2.6 percent in 2014.
"Weak global growth continues to hurt labor markets," U.N. Assistant Secretary-General for Economic Development Lenni Montiel said at a news conference. "Unemployment is on the rise in some regions, or remains stubbornly high in some countries. At the same time, job insecurity is becoming more entrenched amid the shift from salaried work to self-employment."
One of the striking features is a sharp decline in investment across a large set of countries, said Hamid Rashid, chief of the Global Economic Monitoring Unit at the U.N. Department of Economic and Social Affairs. All but five of the 20 largest developing countries observed a decline in investment over the last 18 months, he said.
There was one positive statistic with implications for efforts to combat climate change: There was no growth in energy-related carbon emissions in 2014. It was only the second time that has happened in the past 20 years. The first was in 2009 when the global economy contracted.
"This suggests that the world may start to see some de-linking between economic growth and carbon emission growth," Monteil said.
Looking ahead, Monteil said "we expect only modest improvement in the global economy during the next two years." The report forecasts that global growth will reach 2.9 percent in 2016 and 3.2 percent in 2017.
Rashid said oil prices have dropped significantly because there is "huge oversupply in the market." The U.N. expects this excess supply to dissipate and oil prices to go up from around $45 a barrel now to about $63 a barrel by 2017.
He cautioned that it is very difficult to forecast commodity prices, but "we are reasonably optimistic that this has bottomed out."
Rashid said demand for commodities including iron ore and metals should increase as excess supplies are used up. He said demand has picked up in India and other countries that are doing well.
"But we don't expect a major rebound by any means," Rashid said.