The United Nations’ economists predict a decrease in global economic growth in 2024.
Economists from the United Nations predict a slow global growth for this year due to uneven international recovery from the COVID-19 pandemic. They also warn that unexpected factors like climate disasters and political conflicts could hinder progress.
The United Nations’ main report, the World Economic Situation and Prospects 2024, released on Thursday, predicts a decrease in global economic growth from 2.7% in 2023 to 2.4% this year. This is lower than the growth rate of 3% before the pandemic.
According to Shantanu Mukherjee, the director of the Economic Analysis and Policy Division at the U.N. Department of Economic and Social Affairs, the stronger-than-anticipated results for 2023 are mainly influenced by a few major economies, including the United States, Brazil, India, and Mexico.
However, he stated that there is a possibility for the growth to decline this year, particularly in the United States. This is due to the impact of high interest rates, decreased consumer spending, and a less robust labor market.
Mukherjee informed journalists that the overall environment is still unstable and we are not yet free from potential dangers.
The European continent is currently facing economic difficulties due to inflation and high interest rates, as well as the impact of Russia’s conflict in Ukraine. The 27 countries within the bloc are projected to experience a 1.2% increase in gross domestic product for the year.
“The region’s growth rate is quite modest, even with some recovery of lost output,” commented Hamid Rashid, the head of the Global Economic Monitoring Branch at the U.N. Department of Economic and Social Affairs. “We can directly attribute this to the effects of the war.”
Long-term impacts of the COVID-19 pandemic on businesses
Many developing nations continue to face challenges in recovering from the effects of COVID-19, while also dealing with elevated interest rates and increasing debt. Economic experts predict that approximately 25% of developing countries will experience annual inflation rates above 10% in the current year.
Globally, the projected average inflation rate for this year is 3.9%, a decrease from 5.7% in 2023.
Mukherjee states, “This is a swift shift.” In 2022, we observed 8.1%.
The U.N. report discovered that China’s rebound from the pandemic was not as swift as anticipated. However, the country experienced a positive change in the latter half of 2023, with the growth rate projected to reach 5.3% for the year, a significant increase from 3% in 2022.
Rashid expressed a positive outlook for China’s growth in the near future, stating that it is expected to remain stable.
According to economists, Africa is expected to experience slight growth in its economy, increasing from an estimated 3.3% in 2023 to 3.5% in 2024. This growth is predicted to be primarily propelled by countries located in east and southern Africa.
The anticipated growth rate for East Asia is expected to decrease from 4.9% in 2023 to 4.6% in 2024, primarily due to a decrease in global demand for exports.
The situation in Latin America and the Caribbean is getting worse.
Trade plays a crucial role in the overall well-being of the global economy. Although it did not decrease in the previous year, it experienced minimal growth.
Rashid stated that without a revival in global trade, which has been a vital source of economic advancement for numerous developing nations, we will not witness the resumption of the pre-pandemic growth.
The financial forecast may not be entirely negative, but specialists will be keeping an eye on various factors to assess this year’s economic potential. These may involve difficulties stemming from stricter monetary policies, decreased international trade and investments, and increased risks related to debt.
It is believed that these issues can be made worse by increased geopolitical risks and the increasingly severe effects of climate change.