- Mr. Speaker, Sir, it is estimated that the world economy grew by 2.5 percent in 2001. This is in stark contrast with the 4.7 percent growth experienced in the previous year. Across the world, the tragic events of September 11th and their aftermaths, as well as the weakening world economy, contributed to a sharp deterioration in consumer and business confidence. However, despite initial fears of a global recession the impact has been largely short-lived and signs of recovery have been observed in many countries, both in the developed and developing world.
Industrial Countries
- Mr. Speaker, Sir, economic growth in industrialized countries reached only 1.2 percent in 2001. In the United States of America, output in 2001 grew by 1.2 percent, a fall of 2.9 percentage points over growth in 2000, while unemployment rose from 4.0 percent in 2000 to 4.8 percent in 2001. In Europe, real GDP growth was 1.7 percent in 2001. However, the extent of the slowdown has differed considerably across countries. The downturn has been particularly marked in Germany where growth in 2001 was less than 1 percent and unemployment increased to almost 9 percent. In the United Kingdom and, to a lesser extent in France, growth has been sustained with the UK maintaining 2.2 percent growth rate in 2001.
Developing Countries
- In the developing world, the poorest nations have been adversely affected by the economic slowdown of the developed countries, primarily through reduced commodity prices and falling external demand as markets for their products have contracted in the United States, Europe and Japan. The impact of the economic downturn on the world’s developing regions has varied considerably. Countries in East Asia and, more particularly Latin America, with large manufacturing exports and close trade links with the United States, were the first to feel the impact. Latin American countries have also been faced with the consequences of the economic crisis in Argentina.
- In South Asia, which is less integrated in the world economy, the slowdown has had a minor impact with real GDP growth of 4.2 percent in 2001. However, in the newly industrialized economies of Hong Kong, Korea, Singapore and Taiwan, the fall in world demand brought a sharp decline in growth rates.
- Mr. Speaker, Sir, growth in Africa has been largely sustained despite the weak external environment, with overall economic growth of 3.7 percent in 2001. Growth among the oil exporting countries generally picked up in 2001 as a whole although this was largely supported by higher oil prices at the end of 2000. Sound economic policies have enabled a number of African nations, including Botswana, Senegal, Tanzania and Uganda, to offset the problems caused by commodity price weaknesses. In South Africa, the slow depreciation of the Rand, which had been sliding for some time, accelerated following the September 11th attacks in United States of America, losing more than 20 percent of its value between September and December 2001 while the growth rate fell to 2.2 percent.
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