Resilience of developing countries bodes well for the global economy

The United Nations Department of Economic and Social Affairs recently raised its global economic growth forecast for this year to 2.7 percent from the 2.4 percent it made at the start of the year. It raised the growth forecast for developed economies from 1.3 percent to 1.6 percent, and for developing economies from 4.0 percent to 4.1 percent. Earlier, the International Monetary Fund had also raised the growth prospects for advanced economies, emerging markets and developing economies.

The UN and IMF reports have both attached great importance to the role of advanced economies in driving global economic growth. The IMF, for example, noted that global economic expansion will stem from the "surprisingly strong growth in the United States as the world's largest economy", while the UN report highlighted the role of North America, Europe and Japan, saying unemployment in these regions is near record lows.

Despite improving growth expectations for developing economies, the two institutions, however, highlighted the fact that "developing economies continue to struggle with high inflation", stressing that many of them are facing higher borrowing costs, persistent exchange rate pressures, and political instability.