The United Nations released its semi-annual World Economic Situation and Prospects Report. The prospects are not so good. From the UN News Center

The deepening credit crisis in affluent countries triggered by the continuing housing slump, the declining value of the United States dollar, persisting global imbalances and soaring oil and commodity prices pose major threats to economic growth around the world, according to a report released today by United Nations economists.

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Today’s report, issued by the UN’s Department of Social and Economic Affairs (DESA), predicts that world economic growth will fall steeply to 1.8 per cent this year and 2.1 per cent next year, down from 3.8 per cent in 2007.

The report says that much depends on developments in the US, which remains the prime driver of the global economy, and where a crashing housing market and finance and credit weaknesses set off the global downturn.

A worst-case scenario would see the “world economy come to a virtual standstill” if recent financial measures in the US fail to turn the economy around, and house prices continue to fall, blending with a severe tightening on credit.

Read more. And for readers interested in learning more about the mortgage crisis, I fully recommend checking out last week’s episode of This American Life from Chicago Public Radio.

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