US could spark global fall - UN

THE apparent US economic slowdown could trigger global recession this year and stymie years of robust growth in Asia and Africa, the UN said."

The major uncertainty for 2008 now emanates from the US economy," according to the world body's World Economic Situation and Prospects 2008. "

A further slowdown in the world's major economy will hit many of the poor nations hard, as it will slow world trade and put an end to the boom in commodity prices that benefited them over the past years," it said.

The report said the economies of Japan and Western Europe, already operating near production potential, were not capable of taking up the slack. "

The domino effect of a US recession would be to knock down export growth from China, Europe and Japan, in turn reducing their demand for exports from developing countries," it said.

The report forecast that the world economy would grow at 3.4 per cent this year, down from 3.7 per cent in 2007 and 3.9 per cent in 2006.

It stressed that world growth was "robust and broad-based" last year, with more than 100 economies posting 3 per cent growth of per capita output or more.

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