THE global economy is expected to continue to grow over the next two years, the United Nations yesterday reported, but stronger international policy coordination is needed to steady the remaining fragility in the banking system and geopolitics which could hamper financial stability.

Growth is expected to expand 3.0 per cent in 2014 and 3.3 percent in 2015, compared with estimated growth of 2.1 per cent for 2013, according to the ‘World Economic Situation and Prospects 2014' (WESP) report preview launched yesterday.

"The world economy experienced subdued growth for a second year in 2013, but some improvements in the last quarter have led to the UN's more positive forecast," said the UN Department of Economic and Social Affairs and the UN Conference on Trade and Development (UNCTAD). They produced the report in cooperation with the Organization's five regional commissions.

The UN made its predications on factors that include an end to the euro's protracted recession and somewhat stronger growth in the United States, according to the news release.

In the US, fiscal tightening and a series of political gridlocks over budgetary issues impacted growth, but the trajectory is expected to increase 2.5 per cent in 2014.

Meanwhile, Western Europe remains weak despite emerging from recession. Fiscal austerity and unemployment are expected to remain "elevated," according to the report, with predicted growth of 1.5 per cent in 2014 – similarly to the forecasted growth for that year in Japan.