Global economy
He cited conflict, trade slowdowns, rising interest rates and climate disasters
Dubai – Al Arabiya.net
Published on: 5 January 2024: 11.23am GST Last updated: 5 January 2024: 12.59pm GST
The United Nations released a “bleak” global economic forecast for 2024 on Thursday, citing challenges caused by escalating conflicts, slowing global trade, continued high interest rates and increasing climate disasters.
In its main economic report the United Nations expected global economic growth to slow to 2.4% this year from 2.7% in 2023, beating expectations. But both are still below the 3% growth rate before the COVID-19 pandemic began in 2020, he added.
According to the Associated Press, the United Nations forecasts are lower than those of the International Monetary Fund in October and the Organization for Economic Co-operation and Development in late November.
The International Monetary Fund expects global growth to slow from an expected 3% in 2023 to 2.9% in 2024. The Paris-based Organization for Economic Co-operation and Development, which has 38 member states among the countries with the more advanced, estimated that international growth will also slow from the 2.9% expected in 2023 to 2.7%. % in 2024.
The 2024 World Economic Situation and Prospects report warns that the prospect of prolonged tightening of credit conditions and rising financing costs represent “strong headwinds” for the indebted global economy, especially in poorer developing countries, which require investments to relaunch growth.
Fears of a recession in 2023 were averted largely thanks to the United States, the world’s largest economy, managing to contain high inflation without slowing down the economy, said Shantanu Mukherjee, director of the Department of Economic Analysis and United Nations policy.
But in a press conference to mark the launch of the report he said: “We are not out of the danger zone yet.”
This is because the unstable situation in the world can lead to an increase in inflation, Mukherjee said. For example, another shock in the supply chain or a problem with the availability or distribution of fuel could lead to a new interest rate hike to bring the situation under control, she added.
He continued: “We don’t expect a recession per se, but the main source of risk is fluctuations in the environment around us.”
Mukherjee added that very high interest rates for a prolonged period and the threat of possible price shocks were contributing to a “very difficult balancing act. That’s why we said we’re not out of the woods yet.”
According to the report, the global inflation rate, which was at 8.1% in 2022, is expected to fall to 5.7% in 2023, and is expected to fall further to 3.9% in 2023.
But annual inflation is expected to exceed 10% in about a quarter of all developing countries this year.
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2024-01-05 08:59:52
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