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Last Updated: Thursday, 31 August 2006, 20:04 GMT 21:04 UK
UN study knocks Japan and Germany
German shoppers
German shoppers need to buy more imported goods, the report says
Japan and Germany need to do more to help stimulate the world economy, the UN agency Unctad has warned.

In its annual report, it said the US was having to shoulder too much of the burden of sustaining worldwide demand for goods and services.

With the Japanese and German economies underperforming, the report warns that any big downturn in the US could have serious global repercussions.

It said Japan and Germany needed to lower their trade surpluses.

The global development report, issued each year by the UN Conference on Trade and Development (Unctad), said both countries should start buying more imports.

It pointed to the contrast between Japan and Germany's large trade surpluses and the US's record trade deficit.

'Warning signal'

"It's a big credit to the US economy that it has been providing the growth impetus while some parts of the world have not been participating, like Europe," said Supachai Panitchpakdi, Unctad's head.

He warned that America's trade deficit - $730bn (384bn) in 2005 - needed to be reduced, and that Americans could not continue buying so many foreign goods forever.

Mr Panitchpakdi said the issue was now so serious, the time had come to issue a "warning signal".

He said economies in the developing world will significantly suffer if the US cuts its overseas spending and other developed nations - most notably Germany and Japan - do not pick up the slack.

A spokesman for the German Economics Ministry rejected the suggestion that his country was not doing enough to stimulate world trade.

He added that the German economy grew 0.9% in the second quarter of 2006, its fastest pace in more than five years.

The Japanese economy is also continuing to recover after a number of years of recession and deflation.

The Unctad report also looked at the growing value of remittances sent by migrant workers back to developing countries.

It said such payments increased fourfold between 1990 and 2004, becoming an increasingly important source of foreign exchange for the developing world.

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