UN offers somber outlook for global economy

UN

The United Nations has issued a somber global economic forecast for 2024, pointing to challenges from escalating conflicts, sluggish global trade, persistently high interest rates and increasing climate disasters.

In its flagship economic report, the U.N. 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 3 percent growth rate before the COVID-19 pandemic began in 2020, it said.

The U.N. 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 3 percent in 2023 to 2.9 percent in 2024. The OECD estimated that international growth would also slow from an expected 2.9 percent in 2023 to 2.7 percent in 2024.

The U.N.’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 U.N.’s Economic Analysis and Policy Division, said fears of a recession in 2023 were averted mainly due to the United States, curbing high inflation without putting the brakes on the economy.

“We’re still not out of the danger zone,” he said.

Mukherjee said that’s because the unsettled situation in the world could fuel inflation.

“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.