The United Nations predicted on Wednesday that global economic growth would fall significantly to 1.9% this year due to the food and energy crisis triggered by the war in Ukraine, the continued impact of the COVID-19 pandemic, the persistence of high inflation and the climate emergency. .
Painting a bleak and uncertain economic outlook, the United Nations Department of Economic and Social Affairs said the current global economic downturn “affects both developed and developing countries, with many downside risks in 2023”.
“A widespread and severe slowdown in the global economy is looming against a backdrop of high inflation, aggressive monetary tightening and heightened uncertainty,” UN Secretary-General Antonio Guterres said in a preface to the report. of 178 pages.
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The report said the economic growth forecast of 1.9% for this year _ against an estimate of 3% in 2022 _ is one of the weakest growth rates in recent decades. But he forecasts a moderate recovery to 2.7% in 2024 if inflation gradually subsides and economic headwinds begin to ease.
In its annual report released earlier this month, the World Bank, which lends money to the poorest countries for development projects, nearly halved its growth forecast from the previous projection of 3% to just 1.7%.
The International Monetary Fund, which lends to needy countries, forecast in October that global growth would slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. IMF Managing Director Kristalina Georgieva , said at the World Economic Forum in Davos last week. that 2023 will be a difficult year, but blocked by the projection and said “we do not expect a global recession”.
According to the UN report, this year “growth momentum has weakened in the United States, the European Union and other developed economies, which has had a negative effect on the rest of the world. Mondial economy”.
In the United States, GDP is expected to increase by only 0.4% in 2023 after an estimated growth of 1.8% in 2022, according to the UN. And many European countries are set to experience “a mild recession” with the war in Ukraine entering its second year on February 14, high energy costs, inflation and tighter financial conditions depressing consumption and oil. household investment.
The economies of the 27 countries of the European Union are expected to grow by just 0.2% in 2023, compared to an estimated 3.3% in 2022, according to the UN. And in the UK, which left the EU three years ago, GDP is expected to contract by 0.8% in 2023, continuing a recession that began in the second half of 2022, he said.
As the Chinese government ditched its zero-COVID policy late last year and eased its monetary and fiscal policies, the UN predicts its economy, which grew just 3% in 2022, will accelerate to 4 .8% this year.
“But reopening the economy is expected to be bumpy,” the UN said. “Growth will likely remain well below the pre-pandemic rate of 6-6.5%.”
The UN report says Japan’s economy is expected to be among the best performing among developed countries this year, with GDP growing at 1.5%, slightly lower than estimated growth of 1.6% last year .
Across East Asia, the UN said economic recovery remains fragile, although GDP growth in 2023 is expected to reach 4.4%, up from 3.2% last year, and stronger than in other regions.
In South Asia, the UN expects average GDP growth to slow from 5.6% last year to 4.8% this year due to high food and energy prices, “monetary tightening and fiscal vulnerabilities”.
But growth in India, which is expected to overtake China this year as the world’s most populous nation, is expected to remain strong at 5.8%, slightly lower than the 6.4% estimated in 2022, “as interest rates higher and a global slowdown are weighing on investment and exports,” the UN report said.
In West Asia, oil-producing countries are benefiting from high prices and rising production as well as a recovery in tourism, according to the UN. But non-oil producing economies remain weak “given tighter access to international financing and severe fiscal constraints”, and average growth in the region is expected to slow from around 6.4% in 2022 at 3.5% this year.
The UN said Africa has been hit “by multiple shocks, including weaker demand from major trading partners (particularly China and Europe), sharp increases in energy and food prices food, rapidly increasing borrowing costs and adverse weather events”.
One of the results, he said, is the increase in debt servicing which has compelled a growing number of African governments to seek bilateral and multilateral support.
The UN forecast economic growth in Africa to slow from around 4.1% in 2022 to 3.8% this year.
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In Latin America and the Caribbean, the UN said the outlook “remains challenging”, citing labor market prospects, stubbornly high inflation and other issues. It forecasts regional growth to slow to just 1.4% in 2023, from an estimated 3.8% expansion in 2022.
“The region’s largest economies – Argentina, Brazil and Mexico – are expected to grow at very low rates due to tighter financial conditions, weaker exports and domestic vulnerabilities,” the report said. UN.
For the world’s least developed countries, the UN said growth is expected to be 4.4% this year, about the same as last year, but well below the target for UN by 7% by 2030.