United Nations Radio

The ongoing financial crisis in developed countries and the volatile prices of commodities will mean lower global economic growth for the rest of this year and into 2009.

A new report by the UN Conference on Trade and Development (UNCTAD) predicts that world output will grow by around 3% in 2008, almost one percentage point less than in 2007.

The growth in developed economies is expected to be only 1.5%, while in developing countries the growth is expected to exceed 6%, as a result of the steady domestic demand in a number of large developing economies.

Still, UNCTAD is worried that fallout from the recession in the developed world, could lead to slower growth in developing countries, as well.

UNCTAD Secretary-General Supachai Panitchpakdi (photo), says the only 'qualified' bright spot in the report is sub-Saharan Africa.

"This year it is probably the only region that will be seeing a rising rate of economic growth, which might reach 7%. But this is mainly attributable to the effects from the income from commodity export, mainly oil. So, positive growth, but it's not fully confirmed that all this would help towards poverty reduction."

UNCTAD experts are critical of the current system of global financial governance that has led to the present crisis of bad loans and bursting of speculative bubbles. They are calling for tighter regulation to reduce volatility, as well as costly public bailouts.

This is Donn Bobb reporting for United Nations Radio.

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