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Follow on Google News | High Unemployment Remains the Most Serious Challenge Facing Governments, says Rolf MullerThe global economy is moving forward, but divergence between countries and regions reflects the uneven progress made toward recovery from the economic crisis.
By: Rolf Muller World real gross domestic product (GDP) is projected to increase by 3.1% this year and by 4% in 2014. In the US, activity is projected to rise by 1.9% this year and by a further 2.8% in 2014. GDP in the Euro area is expected to decline by 0.6% this year and then rebound by 1.1% in 2014, while in Japan GDP is expected to grow by 1.6% in 2013 and 1.4% in 2014. “The global economy is strengthening gradually, but the upturn remains weak and uneven,” Downside risks to the outlook have narrowed, but are still large. Adverse interactions between weakly capitalised banks, government finances and the real economy remain a significant risk in the euro area. Fiscal concerns remain in the United States and Japan in the absence of credible medium-term consolidation plans. Future withdrawal of exceptional monetary policy measures could lead to instability in financial markets. There is a risk that potential growth rates may be lower than currently estimated following the global economic crisis. According to Rolf Muller’ Rolf Muller advise that urgent action must be taken to reduce unemployment, which has risen to dangerous levels in many countries. Jobs are being created in some countries, but more must be done. While labour markets are set to firm gradually in the United States and Japan over the coming two years, unemployment is likely to continue to rise further in the euro area, stabilising above 12% only in 2014. “Youth unemployment needs to be tackled and policies adapted to make sure that cyclical unemployment does not become structural,” Milisauskas said. “Similarly, wider product market reforms - particularly in the retail trade and professional services sectors – offer the best potential for creating jobs.” End
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