UN report issues dire forecast for world economy

[Hannah Bell]

The United Nations’ Department of Economic and Social Affairs (DESA) updated its “World Economic Situation and Prospects” report last Thursday, forecasting world growth this year of negative 2.6 percent. World trade is expected to decline by 11.1 percent—the sharpest annual contraction since the 1930s. The latest estimates are revised sharply downward from previous UN forecasts in January of positive 1 percent growth for 2009, with even the most pessimistic scenario then anticipating negative 0.5 percent growth.


The revised figures are another indication of the unprecedented rapidity with which the slowdown in global economic activity has developed. Putting paid to recent optimistic US media reports of a potential imminent recovery, DESA’s director of the development policy and analysis division Rob Vos said there were “no green shoots to be seen which could signal beginnings of a new spring in this still very wintry landscape”.


The report predicts a contraction of 3.9 percent for the advanced economies in 2009. The US economy is forecast to shrink by 3.5 percent. “With unemployment rising sharply and financial de-leveraging continuing, the risk of the economy falling into a protracted deflation is still increasing,” the UN warns.

Data released by the US Commerce Department on Friday added further weight to the UN forecast. First quarter 2009 US gross domestic product (GDP) declined by 5.7 percent, not as severe as the previous quarter’s 6.3 percent contraction, but still worse than most economists’ predictions. The Commerce Department noted that quarterly corporate profits nevertheless increased by an average of 3.4 percent. This was driven by financial sector profits, up an astonishing 94.9 percent due to the Obama administration’s bailout measures; non-financial sector profits fell by 8.6 percent.

http://www.wsws.org/articles/2009/jun2009/unec-j01.shtml

[Hannah Bell]

1. Particularly telling: "financial sector profits, up 94.9 percent due to the bailout"

"The Commerce Department noted that quarterly corporate profits nevertheless increased by an average of 3.4 percent. This was driven by financial sector profits, up an astonishing 94.9 percent due to the Obama administration’s bailout measures; non-financial sector profits fell by 8.6 percent."

[blindpig]

2. We ain't seen nothin' yet.

The people running the world economy, the capitalists, fully qualify for the 'Jackass' franchise.

"Watch this...."

k&r