Recession is going to grip the world once again according to the United Nations. The global economic growth will slow down in 2012. And this time round, even powerhouses like India and China will not be able to recover the situation like it did last year. “World Economic Situation and Prospects 2012” report has shown a gloomy picture when it comes to the global growth. The growth is reported to be only 2.6 percent as compared to the year 2010 when it was 4 percent.
The year 2012 is being as a ‘make-or-break’ year for the global economy. It will continue to grow at a slow pace. According to the UN report, following two years of anaemic and uneven recovery from the global financial crisis, the world economy is teetering on the brink of another major downturn, and the risk for a double-dip recession has heightened”. The factors which are responsible for such a gloomy situation are many and varied. The policy makers particularly those in Europe and United States have been unsuccessful in addressing the job crisis. They have also failed to prevent sovereign debt crisis and the vulnerability of the financial sector has increased all the more. This has put a greater risk for the global economy in 2012-13.
The UN report affirmed that this global downturn is also a result of continual flaw in major developed economies. After the recession period of 2008-2009 most of the problems are left unsolved. It has also been noticed that most of the developed countries Governments have arbitrarily switched from fiscal stimulus to premature austerity measures. This has put additional pressure on the global economy which is already weakened by high unemployment.