The UN’s World Economic Situation and Prospects (WESP) report for 2024 projects a slowdown in global growth from an estimated 2.7 per cent in 2023 to 2.4 per cent in 2024.
The flagship forecast, unveiled in New York on Thursday, indicates that the stronger-than-expected GDP growth in 2023, emerging from the COVID-19 pandemic, masked short-term risks and structural vulnerabilities in the world economy.
The sombre short-term outlook is based on persistently high-interest rates, further escalation of conflicts, sluggish international trade, and an increasing frequency of climate disasters. These factors pose significant challenges to global growth.
It points to a prolonged period of tighter credit conditions and higher borrowing costs, presenting strong headwinds for a world economy burdened with debt and in need of increased investments to stimulate growth, combat climate change, and accelerate progress towards the Sustainable Development Goals (SDGs).
“2024 must be the year when we break out of this quagmire. By unlocking big, bold investments, we can drive sustainable development and climate action and put the global economy on a stronger growth path for all,” said UN Secretary-General António Guterres.
“We must build on the progress made in the past year towards an SDG Stimulus of at least $500 billion per year in affordable long-term financing for investments in sustainable development and climate action.”
The report projects a global decline in inflation from an estimated 5.7 per cent in 2023 to 3.9 per cent in 2024, though price pressures remain elevated in many countries. Any further escalation of geopolitical conflict is expected to exacerbate this situation.
About a quarter of all developing countries are projected to experience annual inflation exceeding 10 per cent in 2024, according to the report.
Consumer prices in developing economies have surged by a cumulative 21.1 per cent since January 2021, significantly undermining the economic gains achieved following the COVID-19 recovery.
“Persistently high inflation has further set back progress in poverty eradication, with especially severe impacts in the least developed countries,” Li Junhua, Head of the UN’s Department of Economic and Social Affairs (DESA), said.
“It is absolutely imperative that we strengthen global cooperation and the multilateral trading system, reform development finance, address debt challenges and scale up climate financing to help vulnerable countries accelerate towards a path of sustainable and inclusive growth.”
The report highlights a projected drop in GDP growth for the United States, the world’s largest economy, from 2.5 per cent in 2023 to 1.4 per cent in 2024. Factors such as high interest rates and a weakened labour market are expected to lead to a decline in consumer spending, a vital economic driver.
China, amidst domestic and international challenges, is forecasted to experience a moderate slowdown, with growth estimated at 4.7 per cent in 2024, down from 5.3 per cent the previous year.
Both Europe and Japan face growth challenges, with growth rates predicted at 1.2 per cent for both regions in 2024.
The 2024 WESP report emphasizes the urgency of addressing these diverse challenges, calling for strengthened global cooperation, particularly in areas such as climate action, sustainable development financing, and addressing the debt sustainability challenges faced by low and middle-income countries. Enhanced global cooperation is essential.
(NAN)
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