World bodies warn of mass job cuts, crawling growth

The economic crisis could throw 50-million people out of work by the end of this year, and output risks crawling to a halt worldwide, international bodies warned on Wednesday, darkening gloom at the Davos summit.

“We have to assume that we are now facing a global jobs crisis,” Juan Somavia, director general of the Geneva-based International Labour Organisation (ILO), told journalists.

An ILO report said that “global unemployment in 2009 could increase over 2007 by a range of 18-million to 30-million workers, and more than 50-million if the situation continues to deteriorate.”

“The ILO’s message is realistic, not alarmist,” Somavia said.

The past few days have seen an avalanche in announced job cuts in Europe, Asia and the United States, affecting tens of thousands of workers.

Wednesday was no exception as the Philippines said as many as 300 000 people, from a workforce of 37-million, could be thrown out of work in the next six months.

The International Monetary Fund (IMF), meanwhile, forecast the slowest pace of growth for the world economy since World War II.

It also revised upward its estimate for the cost of the crisis to world financial institutions, to $2,2-trillion.

“The world economy is facing a deep recession,” said the IMF, a 185-nation body that acts as a lender of last resort for countries in desperate economic trouble.

“Despite wide-ranging policy actions, financial strains remain acute, pulling down the real economy,” it said, in an update of November forecasts that shaved about 1,75 points off its prior global growth estimate.

It said the advanced economies were now seen contracting by 2%, a sharp downward revision from the negative 0,3% estimate two months ago.

Assuming effective measures are taken to address the crisis, the IMF forecast the global economy would recover in 2010, with growth of 3%.

The spreading crisis and the fight against recession top the agenda this week at the World Economic Forum, the annual get-together of world policymakers and leading business figures at the Swiss mountain resort of Davos.

Several speakers there warned of the gravity of the downturn. Chinese Premier Wen Jiabao said China faces “severe challenges”, with rising unemployment in rural areas and “downward pressure on economic growth”.

World leaders elsewhere were also on the move against recession and joblessness.

Japanese Prime Minister Taro Aso said a 400-billion-yen ($4,48-billion) fund for local governments would aim to create 1,6-million jobs in the next three years.

There was mixed news on Wednesday in Europe, where Spain’s central bank said the economy fell into recession for the first time since 1993, contracting during the final two quarters of 2008.

Spain joins Germany, Britain, Italy and Ireland in a club of European Union heavyweights burdened by negative growth.

Ireland’s Prime Minister, Brian Cowen, warned its economy will shrink by up to 10% between 2008 and 2010—a rate of contraction “without precedent”, he told Parliament.

But there were also tentative signs of improvement in the economic climate in Germany, the largest eurozone economy, and France.

German consumer confidence was projected to be stable in February, according to a survey by the GfK institute. In France household consumer confidence picked up in January, the national statistics institute said.—AFP

.

Client Media Releases

Fedgroup drives industry reform in unclaimed benefits sector
Hardworking students win big at architecture awards
VUT presents 2019 registration introduction
Vocational training: good start to great career