This report is sure to come as a shocker for all those who thought the worst was over after believing that the recession is petering out. The recently released World Economic Situation and Prospects 2010 (WESP) of the United Nations (UN), predicts that the economic growth in the developing world will remain well below the pre-crisis pace of more than 7 per cent per annum. China’s and India’s economies are expected to grow below their potential.

The WESP 2010 data shows that annual price inflation in consumer prices almost touched 10 percent in 2009 and 2010 in India. Between 47 and 84 million more people are estimated to remain poor or to have fallen into extreme poverty in developing countries than would have been the case had the crisis not occurred.

Major setbacks in the progress towards the achievement of the other Millennium Development Goals (MDGs) are also to be expected, especially for the vulnerable populations in low-income countries. Despite the signs of economic recovery, many people are still facing declines in household incomes, rising unemployment and pressure on social services because of dwindling Government revenue. Where these adverse impacts cannot be countered because of weak social safety nets and lack of fiscal space to protect social spending and promote job creation, there are high risks of long-lasting setbacks in human development.

The report finds that in East and South Asia, vulnerable employment affects about 70 per cent of the workforce and available data suggest that this share has increased significantly as a consequence of the crisis. In the developing world at large, the share of working poor is estimated to have increased to 64 per cent in 2009, up from 59 per cent in 2007. Jobs that were shed in export-oriented manufacturing sectors during the time of recession are expected to come back only very slowly. Workers who have shifted to informal sector jobs during the crisis in developing countries are expected to remain there for quite a long time.

Table 1: Annual inflation in consumer prices (in percent)

Source: WESP 2010, Annex table: A.6 Developing economies: consumer price inflation, 2000-2010

The economy of the United States is expected to grow by 2.1 per cent in 2010, following an estimated downturn of 2.5 per cent in 2009. Recovery in both the European Union and Japan is projected to be much weaker, reaching GDP growth of no more than 0.6 and 0.9 per cent, respectively, in 2010. Economic recovery during 2010 is uneven and conditions for sustained growth remain fragile.

For more information please read the following links:

World Economic Situation and Prospects 2010,
http://www.un.org/esa/policy/wess/wesp2010files/pr_en2010.pdf

http://www.un.org/esa/policy/wess/wesp2010files/wesp10es_en.pdf

http://www.un.org/esa/policy/wess/wesp.html

http://timesofindia.indiatimes.com/india/No-financial-crisis-impact-Indias-poor-grew-by-34-mn/articleshow/5553859.cms