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“Following very weak economic growth since 2009, global growth is projected to be only around 3.5 per cent this year, about 2 percentage points below the pre-Great Recession years. Over 200 million people across the world are unemployed, with youth and long-term unemployment at alarming levels in many countries,” the IMF said in a paper released on Thursday.
Income inequality has increased in past decades in many Organization for Economic Cooperation and Development (OECD) countries and is also on the rise in many others. The challenges of growth, job creation and social inclusion are closely linked, noted the paper.
Growth is an essential prerequisite for job creation and social cohesion. In turn, jobs and increased labor force participation, including among women, are important to foster inclusive growth and reduce poverty and income inequality, said the Washington-based global lender.
The IMF could provide more systematic diagnosis of economic growth, job creation and income distribution when consistent with its mandate to help its member countries better understand the effectiveness of their policies to support growth, employment and social inclusion, contended the document.
Earlier in January, the European Commission’s office for Employment, Social Affairs and Inclusion released a report that indicated unemployment in some countries has reached record levels with nearly 19 million people jobless in the eurozone.
An EU report on February 22 forecast slightly higher unemployment rates: 26.9 per cent in Spain (up from 26.6 per cent), while in Greece jobless rates have increased from 19 to 27 per cent over the past year (up from 26 per cent previously forecast).
Portugal’s unemployment rate is 17.3 per cent.
“This has grave social consequences and will, if unemployment becomes structurally entrenched, also weigh on growth perspectives going forward,” said Marco Buti, the European Commission’s top civil servant, in a statement shortly after the report was released.
According to the Employment and Social Developments in Europe Review, “household incomes have declined and the risk of poverty or exclusion is on the rise, especially in member states in southern and Eastern Europe”.
Xinhua and Agencies