SIX YEARS after the start of the financial and economic crisis, the global economy has entered a phase of tepid economic growth. Global economic growth remains significantly below pre-crisis trends and is too slow to close output and employment gaps that opened due to the crisis.
The slowdown in economic activity is especially pronounced in Central and South Eastern Europe, East Asia, South- East Asia and the Pacific, Latin America and the Caribbean and North Africa. Economic growth has accelerated somewhat in some advanced economies and in South Asia, Middle East and Sub-Saharan Africa – but not enough to offset the slowing of activity in other regions.
These trends have intensified existing vulnerabilities, while complicating the task of bringing unemployment and under-employment even back to pre-crisis levels in most countries.
According to International Monetary Fund projections, global economic growth will accelerate slightly over the coming two years thanks in part to lower oil prices and improved financial conditions in some advanced economies. But even if these projections materalise, it is unlikely, based on current policies, that the existing employment and social gaps will be closed significantly.
So far, the current stage of global recovery is supported by accelerating growth in a few developed economies, South Asia and Sub-Saharan Africa, but it remains fragile due to continued lack of aggregate demand as well as structural vulnerabilities related to geopolitical risks, disorderly adjustment of financial markets, continued stagnation in the euro area, mounting inequality and slowing labour force growth.
Youth unemployment remains a concern globally. Young people (aged 15 to 24) continue to be disproportionately hit by the crisis.
The youth unemployment rate reached 13 per cent in 2014, which is almost three times higher than the unemployment rate for adults.
Although new youth cohorts entering the labour market are smaller than their previous counterparts – especially in certain regions, such as East Asia and Latin America – it remains difficult for young people to find jobs in most countries.
These trends persist despite considerable improvements in average educational attainment of youth cohorts. The share of youth in the labour force with tertiary education has increased since 2007 in 26 out of 30 countries for which data area available.
Nonetheless, unemployment rates among young workers with tertiary education have also risen since the onset of the crisis in 16 out of 18 countries.
Many countries are projected to see a substantial increase in youth unemployment, in particular those in which youth unemployment rates are currently below the global average.
The global youth unemployment rate is expected to increase to 13.1 per cent in 2015 and then remain unchanged through 2018.
The largest increases in 2015 will be observed in East Asia and the Middle East, with an expected further increase over the following years.
In contrast, older persons have fared relatively well during the crisis and their unemployment rates have remained stable, even in those countries that have been hit hard.
Unlike previous downturns, when older workers often were rushed into early retirement, enterprises this time around decided to hold on to their most experienced workers. However, there is evidence that for those older workers who did lose their jobs, it is increasingly difficult to obtain new employment.
