Look who's talking: UN tells Lebanon, Jordan to increase GDP growth in 2014
The United Nations said Friday that Lebanon and Jordan need to achieve higher gross domestic product (GDP) growth in 2014 in order to cope with the influx of Syrian refugees.
“Both countries need substantially high growth to accommodate the refugees from Syria and the figures indicate continuing crisis situation of both countries rather than recovery,” the U.N. report on the Global Outlook and Regional Prospects said.
The report, which was released Friday at ESCWA headquarters in Beirut, projected the GDP rate of Lebanon to increase from 1.3 percent in 2013 to 2.4 percent, and in Jordan from 3.2 percent in 2013 to 3.9 percent.
Lebanon and Jordan host the biggest number of Syrian refugees in the region and there is deep concern that the number could increase this year if the three-year conflict did not come to an end soon.
The report warned of grave consequences to the labor force in some of the countries hosting Syrian refugees.
“Economic repercussions of the Syrian crisis are increasingly observed in the labor markets in neighboring countries, including employment high skill requirements,” the U.N. said.
The U.N. report added that geopolitical tensions were projected to remain in sharp focus as a result of the situation in Syria, adding that economic uncertainty would continue to grip neighboring countries.
It also warned of the negative effects of the United States monetary situation on the regional countries.
“The looming monetary tightening in the United States will affect the borrowing costs in the region, particularly in GCC countries,” the report said.
The U.N. believes that the GCC economies will continue to prosper if oil prices remain high or stable.
“The present recovery in the GCC countries still depends on oil prices/revenues. In addition to their direct consequences in the oil sector, they influence economic sentiment and confidence of the nonoil sector. A plunge below $80 per barrel would dent growth and domestic demand,” the U.N. said.
The report also shed light on the spiraling inflation in the region.
The “inflation rate crept up across the region. This was due to the recovering domestic demand in the GCC countries and due to the supply constraints of various kinds in other countries.”
The report also expected a modest growth in the global economy in 2014. “The world economy reached only subdued growth of 2.1 percent in 2013. While most developed economies continued to grapple with the challenge of taking appropriate fiscal and monetary policy actions in the aftermath of the financial crisis, a number of emerging economies, which had already experienced a notable slowdown in the past two years, encountered new domestic and international headwinds during 2013,” it said.
It also noted that some signs of improvement have emerged recently.
“The euro area has finally come out of a protracted recession, with gross domestic product for the region as a whole starting to grow again; the U.S. economy continues to recover; and a few large emerging economies, including China, seem to have at least stopped a further slowdown or will see accelerating growth. World gross product is forecast to grow at a pace of 3.0 and 3.3 percent in 2014 and 2015, respectively,” the report said.
The U.N. stressed that global unemployment remained the key challenge in 2014.
“The global employment situation remains dire, as long-lasting effects from the financial crisis continue to weigh on labor markets in many countries and regions. Among developed economies, the most challenging situation is found in the euro area, in which the unemployment rates have reached as high as 27 percent in Greece and Spain, with youth unemployment rates surging to more than 50 percent.
It added that although the unemployment rate had declined in the United States, it remained elevated.
In developing countries and economies in transition, the unemployment situation is mixed, with extremely high structural unemployment in North Africa and Western Asia, particularly among youth.
“High rates of informal employment as well as pronounced gender gaps in employment continue to characterize labor markets in numerous developing countries,” the report said.
- Go big or go home: Expat salaries soar in Dubai
- Lebanon: Financial analysts warn of long-term economic repercussions after BLOM Bank attack
- Saudi companies analyze switching between Gregorian, Hijri calendars
- Tunisian, Moroccan Chambers of Commerce meet to discuss economic partnership
- Egyptian economic experts predict inflation rate will continue to climb
- The world's local bank reviews Lebanon's economy
- Jordan's challenge: Achieving high growth
- UN report sheds light on the economic repercussions of the Syrian crisis on Lebanon and Jordan
- Higher Council For Domestic Relief and Emergency Situations Needed
- Iraq strife could trigger higher oil prices - IMF’s Lagarde