The global economic outlook is still gloomy and no early recovery from the current recession can be expected, a United Nations report said on Monday.
Despite some "green shoots" of economic recovery, "the economic winter is far from over," said the Trade and Development Report 2009, released by the UN Conference on Trade and Development (UNCTAD).
"Tumbling profits in the real economy, previous overinvestment in real estate and rising unemployment will continue to constrain private consumption and investment for the foreseeable future," said the report.
According to the report, the current crisis is unprecedented in depth and breadth, with virtually no economy left unscathed. Given this background, global economy is expected to fall by more than 2.5 percent in 2009.
Global economic growth may turn positive again in 2010, but it is unlikely to exceed 1.6 percent.
UNCTAD economists expect GDP in developed nations to contract by some 4 percent in 2009, and output in the transition economies to fall by more than 6 percent.
In developing countries, growth is expected to decelerate from 5.4 percent to 1.3 percent in 2009, implying a reduction of average per capita income.
But some developing and emerging-market economies have proved less vulnerable to the current crisis, notably those in East and South Asia, whose economic growth is expected to grow by 3-4 percent during 2009.
The leading economies in East and South Asia -- in particular China and India -- have resisted recessionary forces better than others because their domestic markets play a more important, and increasingly growing, role in total demand, the report said.
Moreover, the rebound in China in the second quarter of 2009 proves the efficacy of government deficit spending if it is applied quickly and forcefully, it added.
In the report, UNCTAD cited deregulation of financial markets as the main cause of the global financial and economic crisis. It also reiterated the need for more stringent financial regulation as well as the reform of the international monetary and financial system.