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World economic growth to continue in 2007 - UNCTAD

The world economy will maintain its momentum and expand for a fifth consecutive year with estimated overall output growth of 3.4% in 2007, the United Nations Conference on Trade and Development (UNCTAD) said on Wednesday.

In its annual Trade and Development Report, UNCTAD said the 2007 growth rate would be a little lower than the 4% growth in 2006, mainly due to the slowdown in the United States. The contraction in the housing market will drag US gross domestic product for 2007 to a modest 2% growth, compared with 3.3% last year, the report said. According to the report, China and India will again set the pace for growth in the developing world, with growth rates of 10.5% and 8.5% in 2007. But the two countries and other emerging economies should continue to take preventive measures, such as increasing domestic demands, in case the US economy slips into a recession, thus affecting their exports, UNCTAD said in the report.

The report predicted a 2.8% economic growth for the European Union and 2.3% growth for Japan in 2007. Africa is expected to continue economic growth of around 6% in 2007, while Latin America and West Asia will slow down only slightly, to around 5%. For now, the world economy is going through a “golden period,” UNCTAD Secretary-General Supachai Panitchpakdi told reporters in Geneva. He said developing countries, including many of the poorest, will continue to benefit from strong demand for primary commodities. (