UN: Global Economy Seen Slowing in 2007

The Under-Secretary-General for Economic and Social Affairs José Antonio Ocampo said that numerous risks, such as the heightened demand for oil, could further reduce the 2007 growth prediction. Ocampo was speaking at the General Assembly Second Committee on economic and financial matters on Monday.

"A decline in the housing market, for example, is a real threat in the United States and could have strong ripple effects. Since that country was suffering from large external deficits, a sharp fall in housing prices could trigger a disorderly adjustment of global imbalances" said Ocampo in a released statement.

On the topic of oil, Ocampo noted that investments need to increase in case there are supply shortages. This is necessary, he said, in order to safeguard the world economy against disruption.

"The longer widening global imbalances are allowed to develop, the higher the risk of a sudden and sharp disorderly adjustment, he noted. For instance, a US recession and devaluation of the dollar could in turn depress the world economy as a whole, with a particularly large impact on developing countries,” Ocampo added.