Global growth to hit 5.3%, fastest in 5 decades: UN report

ANKARA

Global economic growth is estimated to hit 5.3% this year with the recovery from the pandemic, its fastest rate in nearly five decades, according to a UN report released Wednesday.

"The recovery, however, is uneven across geographical, income and sectoral lines," the United Nations Conference on Trade and Development (UNCTAD) said in the report. "Within advanced economies, the rentier class has experienced an explosion in wealth, while low-earners struggle."

UNCTAD said policymakers in advanced economies have not yet realized the size of economic shock to developing countries, or its persistence, adding: "Many countries in the South have been hit much harder than during the global financial crisis, while their now-heavier debt burden reduces their room for fiscal policy."

The pandemic response in developed countries has suspended fiscal constraints, but international rules and practices lock developing countries into pre-pandemic responses and a state of economic stress, according to UNCTAD’s Trade and Development Report 2021.

UNCTAD noted that it expects global growth to slow to 3.6% in 2022, leaving the world income 3.7% below its pre-pandemic level, while it estimates a cumulative income loss of around $13 trillion between 2020 and 2022.

After international trade in goods and services dropped by 5.6% in 2020, it is forecast to grow 9.5% in 2021, while the report added that "recovery has been extremely uneven, and scars will continue to weigh on the trade performance in the years ahead."

Turkey's economy is expected to grow 3.9% in 2021, and 3.6% in 2022, according to UNCTAD, while its real income growth is estimated to soar 5.8% this year, compared to 2019.

Turkey was one of the few countries to post economic expansion in 2020 with 1.8% growth, the report said, adding that there was "an unprecedented credit boom and a subsequent sharp uptick in economic activity."

"Turkey did see a sharp contraction in the second quarter of 2020, but this was followed by strong growth in the third quarter, largely thanks to accommodative monetary policy and the ensuing credit boom," it said.

"Despite a resurgence in infections during the second quarter of 2021, growth has been driven by the country’s industrial sector and budgetary support to businesses from the government," it also noted.