United Nations Security Council
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Global economic growth will speed up modestly in 2014 and 2015 compared to last year’s levels, if U.S. monetary policy doesn’t derail emerging economies, according to a United Nations economic report released Monday.

The U.N. forecasts global economic growth of 3 percent in 2014 and 3.3 percent in 2015, up from an estimated 2.1 percent in 2013.

Economists cited the end of a recession in the euro zone, a U.S. economic recovery, and exaggerated fears of an economic slowdown in China as key drivers of a comforting economic landscape in 2013.

But the U.N. economists warned that as the U.S. Federal Reserve unwinds its $85 billion monthly bond purchases, emerging nations may have the most to lose.

“A bumpy exit from QE [quantitative easing] could lead to a series of disruptive events,” reads the report’s executive summary. “First-round shocks in international financial markets could transmit quickly to the domestic real economic sectors of both developed and developing countries.”

That disruption could include a surge in long-term interest rates in both developed and developing economies; a sharp selloff in global equities; a plunge in capital inflows to emerging markets; and more expensive terms of business for serious trade deficits in emerging economies.

Those risks reflect lessons learned in 2013, when Fed remarks over tapering led to sharp declines in emerging market equities, bonds and currencies. Investors may now be more prepared for such shocks, since tapering featured prominently in 2013’s global economic agenda.

Last week the World Bank also warned in a study that slowing down quantitative easing could have dangerous impacts on developing markets.

According to the U.N. report, global trade in goods should pick up in 2014, more than doubling 2013’s sluggish 2.3 percent growth, as measured by global export volume. Global trade in services has done better and should continue growing through to 2015, while commodity prices – which include food, energy and base metals prices – are expected to stay flat.

Unemployment remains a global problem, with youth unemployment in Greece and Spain as specific areas of concern. Eurostat statistics for 2013 have shown that unemployment for those under 25 can hit 50 percent in those countries. There’s also “extremely high structural unemployment in North Africa and Western Asia, particularly among youth,” wrote U.N. economists.

U.N. economic growth forecasts for 2014 for some world regions follow, in gross domestic product (GDP) terms:

- The U.S. is expected to grow GDP by 2.5 percent in 2014, led by labor and housing recoveries. That should overcome political uncertainty related to the federal budget and the debt limit debate.

- Western Europe is expected to grow 1.5 percent in 2014, slowed by fiscal austerity and high unemployment.

- Japan is expected to grow 1.5 percent in 2014, though loose "Abenomics" monetary policy should be offset by a consumption tax hike in the first half of 2014.

- Among BRICs in 2014, the U.N. sees 3 percent growth for Brazil, 5 percent growth for India, 7.5 percent growth for China, and 2.9 percent growth for Russia.

- Accelerated growth in Africa should be seen at 4.7 percent GDP growth, up from 4 percent in 2013.

In the same report in early 2013, the U.N. said it could take five years before Europe and the U.S. recover the jobs lost in the recessions of 2008 and 2009. Developed economies were expected to face more obstacles and developing economies were projected to drive global growth, according to the U.N.’s early 2013 forecast – though advanced economies actually performed better than expected and emerging markets suffered capital outflows and volatility in 2013.

The U.N. is also focused on achieving its eight Millennium Development Goals, which sought to halve poverty, halt HIV/AIDs and promote universal education, by 2015.

The world gross product, or the value of all goods and services produced globally, stood at $71 trillion in 2012, according to the CIA World Factbook. The U.N. expects this to grow 3 percent in 2014.