The global economy will continue to slow down and grow by 2.4% in 2023, according to the UN

The global economy will grow by 2.4% in 2023, according to the economic forecast report of the UN Conference on Trade and Development (UNCTAD), which raises its previous forecast from six months ago by three tenths, although it warns of the danger of a recession in Europe.

Furthermore, by 2024 the United Nations agency anticipates a slight rebound in the world economy, which would grow by 2.5% according to its estimates.

In general terms, UNCTAD warns of “a slowdown in growth in most regions compared to last year – when the economy grew 3% – and only a few countries bucking the trend”, including Mexico, Brazil, Russia, China or Japan.

In the Old Continent, the report warns of a European Union “on the verge of recession” and revises its forecasts from half a year ago even further downwards: if then it predicted that the Twenty-seven would grow by 0.7%, it now reduces that figure to 0.4%, when in 2022 the increase in regional GDP was 3.4%.

The document expects some recovery in 2024, the year in which GDP growth in the EU would be 1.2%, always according to the report.

German recession

On the European continent, Germany will see its GDP decline by 0.6% in 2023, while there will be modest increases in France (0.9%), Italy (0.6%) and the United Kingdom (0.4%), and higher in Russia (2.2%), a country that would benefit from the comparison with the poor figures of last year, when its economy decreased by 2.1% as it was more affected by sanctions due to its invasion of Ukraine.

“The stagnation or decline in real wages across the continent, combined with fiscal austerity, are slowing growth,” say experts from the United Nations agency.

For all of America, UNCTAD forecasts economic growth of 2%, nine tenths more than estimated in April, thanks to important upward revisions in countries such as the US, Mexico or Brazil, although it would slow to 1.8% in 2024. similar figures for the main regional economy, the United States (2% this year, 1.9% the next).

“Despite the increase in interest rates, the US economy has contradicted the most negative predictions, experiencing a moderate economic slowdown so far,” the report analyzes.

UNCTAD attributes this resilience to strong US consumer spending, the renunciation of fiscal austerity and active monetary intervention to stem the crisis that some banks suffered at the beginning of the year.

In Latin America, the organization forecasts slightly higher growth, of 2.3% (one point more than projected in April), which would drop to 1.8% next year, although the situation in the main economies of the region would be very uneven. .

Good outlook for Brazil

If for Mexico it estimates an advance of 3.2% this year and 2.1% next year, in Argentina it predicts a decline in GDP of 2.4% in 2023 and 0.6% in 2024; Brazil, for its part, would see a notable increase in its economy of 3.3% (2.4 points more than estimated in April) and 2.3%, respectively.

For China, the organization revises this year’s growth two tenths downward (4.6%), although it foresees an acceleration to 4.8% in the next, at a time when the Asian country “shows signs of recovery compared to 2022, but faces weak internal consumer demand and private investment.”

“However, China has more fiscal policy space than other large economies to address these challenges,” believes UNCTAD, which in the case of neighboring Japan estimates progress in the national economy of 2.3% in 2023 and only 0.9% in 2024.

At the global level, UNCTAD recommends “institutional reforms in the global financial architecture, more pragmatic policies to address inflation, inequality and sovereign debt, as well as stronger supervision of key markets.”

“To safeguard the global economy from future systemic crises, we must avoid the policy errors of the past and adopt a positive reform agenda,” UNCTAD Secretary-General, Costa Rican Rebeca Grynspan, stressed when announcing the report. With EFE

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