The world economy in 2023 exceeded expectations with an estimated growth rate of 2.7 per cent, higher than the?forecasted . However, this performance masks underlying short-term risks and structural vulnerabilities.
The , launched on 4 January, presents a sombre economic outlook for the near term, with global growth in 2024 projected to slow to 2.4 per cent. High interest rates, potential escalation of conflicts, sluggish international trade, and increasing climate disasters, pose significant challenges to the world economy.
“Prospects are weakening as years of easy liquidity have turned around, with sharp hikes in interest rates, now expected to stay higher for longer,” said Shantanu Mukherjee, Director of the Economic Analysis and Policy Division of the?Department of Economic and Social Affairs (DESA). “That’s contributing to slowing investments, increasing debt distress, and worsening fiscal conditions.”
These trends do not bode well for developing countries, especially?least developed countries and small island developing States, which are weighed down by heavy debt burdens, rising interest costs, weakening investments, and increasing climate-related vulnerabilities.
While inflation pressures are projected to ease further, decreasing from an estimated average of 5.7 per cent in 2023 to an average of 3.9 per cent in 2024, they are still elevated in many countries. In about a quarter of all developing countries, annual inflation is forecast to exceed 10 per cent in 2024.?
“That will be eating away what people’s earnings can buy and inflicting further pain, especially on the middle-class, and those living in poverty,” added Mr. Mukherjee.
The report presents the economic outlook for developed economies, the economies in transition, and developing economies in Africa, East Asia, Western Asia, South Asia, and Latin America and the Caribbean.?
A special chapter on the risks and challenges of global monetary tightening describes the unconventional monetary policies adopted by major central banks and analyses their lingering effects on developing countries.
The?report also outlines priorities for the international community to stimulate economic growth and accelerate progress on the Sustainable Development Goals.
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