The World Economic Situation and Prospects 2013 (WESP) said the global economy is expected to grow at 2.4% in 2013 and 3.2% in 2014 — a significant downgrade from the UN's forecast six months ago.

"This pace of growth will be far from sufficient to overcome the continued jobs crisis that many countries are still facing. With existing policies and growth trends, it may take at least another five years for Europe and the United States to make up for the job losses caused by the Great Recession of 2008-2009," the report said.

Economies in developing Asia have weakened considerably during 2012, the UN report said, as the region's growth engines, China and India, have shifted into lower gear. "While a significant deceleration in exports has been a key factor behind the slowdown, both economies also face a number of structural challenges that hamper growth. Given persistent inflationary pressures and large fiscal deficits, the scope for policy stimulus in India and other south Asian countries is limited," the report said.

It expects India to grow 6.1% in 2013 and 6.5% in 2014. The Indian government recently slashed the country growth forecast for 2012-13 to between 5.7% and 5.9% citing the impact of the slowdown in the previous quarters. Growth is expected to pick up in the early part of next year, economists said.

The report said China and many east Asian economies possess much greater space for countercyclical policy. In the outlook, average growth in east Asia is forecast to pick up mildly to 6.2% in 2013, from the estimated 5.8% in 2012. GDP growth in south Asia is expected to average 5% in 2013, up from 4.4% in 2012, led by a moderate recovery of India's economy.

It said weaknesses in the major developed economies are at the root of the global economic slowdown. The report said that most of them, but particularly those in Europe, are trapped in a vicious cycle of high unemployment, financial sector fragility, heightened sovereign risks, fiscal austerity and low growth.

Several European economies and the Eurozone as a whole are already in recession, and Eurozone unemployment increased further to a record high of almost 12% this year. Also, the US economy slowed significantly during 2012 and growth is expected to remain meagre at 1.7% in 2013.