Economic growth around the world has weakened considerably in 2012 and will remain so in the next two years, with the prospect of falling back into recession, the UN world economic report warned Tuesday.
"A worsening of the euro area crisis, the 'fiscal cliff' in the United States and a hard landing in China could cause a new global recession," said Rob Vos, author of the World Economic Situation and Prospects 2013.
He said the world economy is fraught with uncertainties and risks and each of the risks could cause global output losses of between 1 and 3 percent.
This year's economic growth pace will not be enough to overcome the unemployment crisis. Europe and the US, with their existing policies, would need at least another five years to make up for job losses in the 2008-2009 recession.
Europe in particular is trapped in a vicious cycle of unemployment, financial sector fragility, heightened sovereign risks, fiscal austerity and low growth, the report said.
Economic difficulties in Europe, Japan and the US have impacted negatively on developing countries' exports and increased volatility in capital flows and commodity prices, it said.
The report called for an internationally coordinated and aligned fiscal policies to support direct job creation and green growth as part of global measures to blunt the decline in world economic growth.
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