UN warns of prolonged period of low growth in 2024
In a recent report, the United Nations has announced that global growth is expected to decline from 2.7 % in 2023 to 2.4 % in 2024, below the pre-pandemic growth rate of 3 %.
According to the UN's World Economic Situation and Prospects Report (WESP) 2024, "a bleak near-term economic outlook" is expected, highlighting persistently high interest rates, escalating conflicts, depressed international trade and increasing climate disasters. All these challenges, according to the UN, pose major challenges to global growth.
By the same token, these problems also undermine progress towards sustainable development.
"2024 must be the year we break the deadlock. By unlocking big and bold investments we drive sustainable development and climate action and put the global economy on a higher growth path for all," said António Guterres, UN Secretary-General, referring to the report.
"We must build on past progress to achieve a SDG stimulus of at least $500 billion per year in long-term, affordable financing for investments in sustainable development and climate action," Guterres added.
In this context, the report says greater international cooperation will be needed to boost economic growth and promote the ecological transition. Global climate finance must also be massively scaled up.
The UN report mentions several countries and regions, such as the United States, where economic growth is expected to slow by 2024 due to high interest rates, declining private consumption and weakening labour markets.
Moreover, near-term growth prospects for many developing countries - especially in East Asia, West Asia, Latin America and the Caribbean - are also deteriorating due to tightening financing conditions, shrinking fiscal space and weakening external demand.
On the other hand, even if global inflation continues to decline - from an estimated 5.7 % in 2023 to 3.9 % in 2024 - the paper published by the UN warns that price pressures remain high in many countries and any further escalation of geopolitical conflicts carries the danger of a further rise in inflation. As a result, about a quarter of developing countries are projected to exceed 10% annual inflation by 2024.
"Persistently high inflation has further set back progress in poverty eradication, with particularly severe impacts on the least developed countries," said Li Junhua, UN Under-Secretary-General for Economic and Social Affairs.
Junhua considers it "imperative" to strengthen global cooperation and the multilateral trading system, reform financing for development, address debt challenges and increase climate finance, with the aim of enabling vulnerable countries to accelerate the path to a sustainable and inclusive growth path.