The world can expect a robust economic growth of 3.6% this year, but it could come down to 3% in 2007, according to the latest United Nations assessment, which warned that widening global imbalances are raising the risk of a sudden and sharp disorderly adjustment.Pointing to the ripple effect of the US economy and the worries about oil supply disruptions, Josi Antonio Ocampo, Under Secretary-General for Economic and Social Affairs, said a number of downside risks could reduce the projection even further.With an increasing income gap between developing and the developed world, a "dual divergence" could be seen alongside a "growth divergence" among the developing countries, he told the UN's General Assembly Second Committee on economic and financial matters yesterday.Ocampo decribed the suspension of the UN World Trade Organization (WTO) Doha Round of talks as a major setback. He said the least developed countries are the most adversely affected by trends in global disparities, and as such, development partners, including other developing countries, should continue to increase their support through the contribution of official development assistance (ODA), debt reduction and the provision of market access.The longer widening global imbalances are allowed to develop, the higher the risk of a sudden and sharp disorderly adjustment, Ocampo noted. For instance, a US recession and devaluation of the dollar could, in turn, depress the world economy as a whole with a particularly large impact on developing countries. (PTI)
