UNCTAD: no signs of global economic recovery but speculations

UNCTAD Economists of the United Nations disputed assertions that the global economy is recovering. They warned against terminating government stimulus injections as this would make the crisis worse.

In its annual report, the U.N. trade and development agency UNCTAD also urged the creation of a new world reserve system using several currencies rather than just the U.S. dollar, and called for tough controls on cross-border financial flows.

"The likelihood of a recovery in the major developed countries that would be strong enough to bring the world economy back to its pre-crisis growth path in the coming years is quite low," the report said.

UNCTAD Secretary-General Supachai Panitchpakdi and senior aide Heiner Flassbeck declined any "green shoots" of recovery in wealthy economies this year.

"We don’t see any real rebound," said Supachai, former head of the World Trade Organisation and one-time deputy prime minister of Thailand. "There is no sign of a strengthening of underlying economic factors."

Figures appearing in the surveys and reports on economic condition in the US, Europe and China that are cited today as a proof of upsurge cannot be taken as a fact, according to conclusions made by the UNCTAD.

"The synchronized rise in a wide range of markets that do not normally move in the same direction shows that what we have been seeing in the first half of the year is driven by speculation," Flassbeck told reporters in Geneva.

"What is going on is speculation on a recovery, an attempt to anticipate a recovery. But it is a fiction, it is not there yet," he said. "It would be very dangerous if governments start talking about exit strategies from stimulus policies."

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