Global economy grows despite sub-prime crisis: UN

FE Team | Published: July 31, 2008 00:00:00 | Updated: February 01, 2018 00:00:00

GENEVA, (Internet): Despite the sub-prime mortgage crisis taking hold in industrialised nations, the overall global economy was still growing in 2007, a new United Nations report says.

Global exports rose by significant amounts - 14 per cent for goods and 18 per cent for services, it found.

However, it expressed concern that poorer nations, which are home to the majority of the world's population, are still struggling to break the dominance of their richer counterparts in the global economy.

In its 2008 Handbook of Statistics, the Geneva-based United Nations Conference on Trade and Development (UNCTAD) said that industrialized nations such as the United States and Japan accounted for over 70 per cent of global gross domestic product (GDP) last year, even though they have only 15 per cent of the world's population.

GDP measures the total market value of all goods and services produced in a country in a given year, and it is often used as an indicator of a nation's wealth.

Behind the strength of industrialised countries is the fact they still provide the majority of exports worldwide.

According to UNCTAD, developed nations are responsible for 60 per cent of the value of merchandise exports and for over 70 per cent of services exports.

Nevertheless, it seems that developing countries are catching up. UNCTAD reported that the rate of growth of exports of goods and services in 2007 was slightly higher for developing countries than for developed countries.

But UNCTAD is still concerned about the actual make-up of the economies of the developing world. According to the agency, "While developing countries sold many products and services overseas, an increasing amount of the value of these exports came from a limited number of goods."

UNCTAD and other experts have been urging the world's poorer nations to diversify their economies so that they are less vulnerable to sudden changes in world markets.