UN predicts slower global growth for 2024
Global economic growth is projected to slow down from an estimated 2.7 percent in 2023 to 2.4 percent in 2024, according to the UN World Economic Situation and Prospects 2024 report launched on Thursday.
▲Customers shop at a supermarket in Foster City, California, the United States, on Dec 21, 2023. [Photo/Xinhua]
Weakening global trade, high borrowing costs, elevated public debt, persistently low investment and mounting geopolitical tensions put global growth at risk, the report said.
Growth in many developed economies, especially the United States, is projected to decelerate given high interest rates, slowing consumer spending and weaker labor markets.
The short-term growth prospects for many developing countries, particularly in East Asia, West Asia, Latin America and the Caribbean, are also deteriorating because of tighter financial conditions, shrinking fiscal space and sluggish external demand.
Low-income and vulnerable economies are facing increasing balance of payments pressures and debt sustainability risks. Economic prospects for small-island developing states, in particular, will be constrained by heavy debt burdens, high interest rates and increasing climate-related vulnerabilities.
"In a nutshell, the world is struggling to get back to the 3.0 percent annual average from 2000 to 2019, representing years of subpar growth," Shantanu Mukherjee, director of the Economic Analysis and Policy Division of the UN Department of Economic and Social Affairs, said at the launch of the flagship report.
This latest forecast came on the heels of global economic performance exceeding expectations last year. However, last year's stronger-than-expected growth masked short-term risks and structural vulnerabilities, the report said.
Growth in the United States is projected to be 1.4 percent this year, following an estimated growth rate of 2.5 percent last year.
"Amid falling household savings, high interest rates and a gradually softening labor market, consumer spending is expected to weaken in 2024 and investment is projected to remain sluggish," the UN said. "While the likelihood of a hard landing has declined considerably, the US economy will face significant downside risks from deteriorating labor, housing and financial markets."
Developed economies
Among major developed economies, the European Union will see a higher growth rate of 1.2 percent this year from an estimated 0.5 percent last year. The Japanese economy will continue to slow, from 1.7 percent last year to 1.2 percent this year.
For developing economies, growth will slightly drop from 4.1 percent last year to 4 percent this year.
China's economy will slow down from the estimated 5.3 percent last year to 4.7 percent this year. India's economy, which was estimated to have expanded 6.3 percent last year, will grow 6.2 percent this year.
Global inflation is projected to decline further, from an estimated 5.7 percent last year to 3.9 percent this year. Price pressures are, however, still elevated in many countries and any further escalation of geopolitical conflicts risks renewed increases in inflation, the report said.
In about a quarter of all developing countries, annual inflation is projected to exceed 10 percent this year. Since 2021, consumer prices in developing economies have increased by a cumulative 21.1 percent, significantly eroding the economic gains made following COVID-19 pandemic recovery. Amid supply-side disruptions, conflicts and extreme weather events, local food price inflation remained high in many developing economies, disproportionately affecting the poorest households.
The report also said global labor markets have seen an uneven recovery from the pandemic. In developed economies, labor markets have remained resilient despite a slowdown in growth. However, in many developing countries, particularly in West Asia and Africa, key employment indicators are yet to return to pre-pandemic levels. The global gender employment gap remains high, and gender pay gaps not only persist but have even widened in some occupations.
Global investment growth is likely to remain subdued and international trade is losing steam as a driver of growth, negatively affecting global growth.
"2024 must be the year when we break out of this quagmire," UN Secretary-General Antonio Guterres said. "By unlocking big, bold investments, we can drive sustainable development and climate action, and put the global economy on a stronger growth path for all."
Source: Xinhua