UN forecasts slow growth of 2.4% in 2024

A man on a boat fishes as a ferry sails by a containers vessel docked at a port shrouded by haze in Xiamen in southeast China’s Fujian province on Dec. 26, 2023. The United Nations issued a somber global economic forecast for 2024 on Thursday, Jan. 4, 2024. / AP
A man on a boat fishes as a ferry sails by a containers vessel docked at a port shrouded by haze in Xiamen in southeast China’s Fujian province on Dec. 26, 2023. The United Nations issued a somber global economic forecast for 2024 on Thursday, Jan. 4, 2024. / APAndy Wong

UNITED NATIONS — The United Nations (UN) issued a somber global economic forecast for 2024 on Thursday, Jan. 4, 2024, pointing to challenges from escalating conflicts, sluggish global trade, persistently high-interest rates and increasing climate disasters.

In its flagship economic report, the UN projected that global economic growth would slow to 2.4 percent this year from an estimated 2.7 percent in 2023, which exceeds expectations. But both are still below the three percent growth rate before the Covid-19 pandemic began in 2020, it said.

The UN forecast is lower than those of the International Monetary Fund in October and the Organization for Economic Cooperation and Development in late November.

The IMF said it expects global growth to slow from an expected three percent in 2023 to 2.9 percent in 2024. The Paris-based Organization for Economic Cooperation and Development, comprising 38 mainly developed countries, estimated that international growth would also slow from an expected 2.9 percent in 2023 to 2.7 percent in 2024.

The UN’s report — World Economic Situation and Prospects 2024 — warned that the prospects of prolonged tighter credit conditions and higher borrowing costs present “strong headwinds” for a world economy saddled with debt, especially in poorer developing countries, and needing investment to resuscitate growth.

Shantanu Mukherjee, director of the UN’s Economic Analysis and Policy Division, said fears of a recession in 2023 were averted mainly due to the United States, the world’s largest economy, curbing high inflation without putting the brakes on the economy.

But he told a news conference launching the report: “We’re still not out of the danger zone.”

Mukherjee said that’s because the unsettled situation in the world could fuel inflation. For example, another supply chain shock or problem in fuel availability or distribution could prompt another interest rate hike to bring the situation under control, he said.

“We’re not expecting a recession, per se, but because there is volatility in the environment around us, this is the major source of risk,” he said.

Very high-interest rates for a long time and the threat of possible shocks to prices contribute to “quite a difficult balancing act,” Mukherjee said. “So that’s really why we said that we are not yet out of the woods.”

According to the report, global inflation, which was at 8.1 percent in 2022, is estimated to have declined to 5.7 percent in 2023 and is projected to decline further to 3.9 percent in 2023.

But in about a quarter of all developing countries, annual inflation is projected to exceed 10 percent this year, it said.

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