June 14, 2024

UN report predicts slow global economic growth in 2024

3 min read
UN report predicts slow global economic growth in 2024

The UN predicted that global economic growth will fall to 2.4% in 2024 from an estimated 2.7% in 2023 in its flagship economic report

The UN predicted that global economic growth will fall to 2.4% in 2024 from an estimated 2.7% in 2023 in its flagship economic report.

Global economic growth is projected to slow down from an estimated 2.7 percent in 2023 to 2.4 percent in 2024, according to the UN World Economic Situation and Prospects 2024 report, launched on Thursday.

Weakening global trade, high borrowing costs, elevated public debt, persistently low investment, and mounting geopolitical tensions put global growth at risk, says the report.

Growth in many developed economies, especially the United States, is projected to decelerate in 2024 given high interest rates, slowing consumer spending and weaker labor markets.

The short-term growth prospects for many developing countries, particularly in East Asia, Western Asia, and Latin America and the Caribbean, are also deteriorating because of tighter financial conditions, shrinking fiscal space and sluggish external demand.

Low-income and vulnerable economies are facing increasing balance-of-payments pressures and debt sustainability risks. 

Economic prospects for small-island developing states, in particular, will be constrained by heavy debt burdens, high interest rates and increasing climate-related vulnerabilities, says the report.

“In a nutshell, the world is struggling to get back to the 3.0-percent annual average from 2000 to 2019, representing years of sub-par growth,” said Shantanu Mukherjee, director of the Economic Analysis and Policy Division of the UN Department of Economic and Social Affairs, at the launch of the flagship report.

This latest forecast came on the heels of global economic performance exceeding expectations in 2023. 

However, last year’s stronger-than-expected growth masked short-term risks and structural vulnerabilities, according to the report.

The UN prediction is lower than that issued by the IMF in October and the Organization for Economic Cooperation and Development in late November.

According to the IMF, global growth will decline from 3% in 2023 to 2.9% in 2024. The Paris-based OECD, which represents 38 primarily industrialized countries, forecasted that international growth would decline from 2.9% in 2023 to 2.7% in 2024.

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The United Nations’ World Economic Situation and Prospects 2024 report warned that the prospect of prolonged tighter credit conditions and higher borrowing costs present strong headwinds for a global economy burdened with debt, particularly in poorer developing countries, and in need of investment to resuscitate growth.

According to the analysis, worldwide inflation, which was 8.1% in 2022, is expected to fall to 5.7% in 2023 and 3.9% in 2023, from 8.1% in 2022.

However, annual inflation is expected to exceed 10% in about a fifth of all developing countries this year, according to the report. 

While the US economy fared remarkably well in 2023, growth is anticipated to fall from an estimated 2.5% in 2023 to 1.4% this year, according to the research.

Despite the country’s monetary and fiscal policies, Japan’s economic growth is expected to slow from 1.7% in 2023 to 1.2% this year, according to the report.

The UN said recovery from COVID lockdowns in China, the world’s second-largest economy, has been slower than projected amid domestic an international headwinds.

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