The UN’s World Economic Situation and Prospects (WESP) report for 2024 anticipates a deceleration in global growth, projecting a decline from an estimated 2.7 per cent in 2023 to 2.4 per cent in 2024.
Launched in New York on Thursday, the flagship forecast indicates that the stronger-than-expected GDP growth in 2023, post-COVID-19, disguises short-term risks and structural vulnerabilities in the world economy.
Based on consistently high interest rates, a further surge in conflicts, slow international trade, and a rise in climate disasters, the grim short-term outlook signifies significant challenges for global growth.
Signaling an extended period of stringent credit conditions and heightened borrowing costs, these challenges pose strong headwinds for a global economy burdened by debt and in need of additional investments to stimulate growth, tackle climate change, and hasten progress towards Sustainable Development Goals (SDGs).
‘2024 must be the year when we break out of this quagmire.’
‘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,’ UN Secretary General, António Guterres, said.
‘We must build on the progress made in the past year towards an SDG Stimulus of at least $500 billion per year in affordable long-term financing for investments in sustainable development and climate action.’
According to the report, global inflation is projected to decline further, from an estimated 5.7 per cent in 2023 to 3.9 per cent in 2024.
It noted that price pressures are still elevated in many countries and any further escalation of geopolitical conflict will add to that.
Read also: Cannabis Is No Longer A Dangerous Drug – United Nations
In about a quarter of all developing countries, annual inflation is projected to exceed 10 per cent in 2024, the report highlights.
Since January 2021, consumer prices in developing economies have increased by a cumulative 21.1 per cent, significantly eroding the economic gains made following the COVID-19 recovery.
‘Persistently high inflation has further set back progress in poverty eradication, with especially severe impacts in the least developed countries,’ Li Junhua, Head of the UN’s Department of Economic and Social Affairs (DESA), said.
‘It is absolutely imperative that we strengthen global cooperation and the multilateral trading system, reform development finance, address debt challenges and scale up climate financing to help vulnerable countries accelerate towards a path of sustainable and inclusive growth.’
The United States, the world’s largest economy, is expected to see a drop in GDP growth from 2.5 per cent in 2023 to 1.4 per cent in 2024.
Consumer spending, a key driver of its economy, is likely to weaken due to various factors, including high interest rates and a softening labour market, the report says.
China, grappling with domestic and international challenges, is poised for a gradual slowdown, projecting growth at 4.7 percent in 2024, down from the 5.3 percent registered last year.
Facing challenges, both Europe and Japan are expected to see growth rates of 1.2 percent in 2024.
However, the 2024 WESP report highlights the necessity for swift action to address these diverse challenges.
The report underscores the crucial need for reinforced global cooperation, particularly in vital areas such as climate action, sustainable development financing, and addressing the debt sustainability challenges of low and middle-income countries. Enhanced global cooperation is imperative.