UN Forecasts Gloomy 1.9% Global Economic Growth This Year

The United Nations (UN) has forecasted that global economic growth will fall significantly to 1.9% this year as a result of the food and energy crisis sparked by the war in Ukraine, the impact of the COVID-19 pandemic, persistently high inflation and the climate emergency, Edith M. Lederer reported for the Associated Press (AP).

Photo Insert: The report said this year’s 1.9% economic growth forecast — down from an estimated 3% in 2022.

Painting a gloomy and uncertain economic outlook, the UN Department of Economic and Social Affairs said in its 178-page report the current global economic slowdown “cuts across both developed and developing countries, with many facing risks of recession in 2023.”

The report said this year’s 1.9% economic growth forecast — down from an estimated 3% in 2022 — is one of the lowest growth rates in recent decades. But it projects a moderate pick-up to 2.7% in 2024 if inflation gradually abates and economic headwinds start to subside.

“A broad-based and severe slowdown of the global economy looms large amid high inflation, aggressive monetary tightening, and heightened uncertainties,” UN Secretary-General Antonio Guterres stressed.

The report said this year’s 1.9% economic growth forecast — down from an estimated 3% in 2022 — is one of the lowest growth rates in recent decades. It notes a moderate pick-up to 2.7% in 2024 if inflation abates.

Earlier this month, the World Bank (WB), which lends money to poorer countries, cut its growth forecast nearly in half, from it previous projection of 3% to just 1.7%.

Shantanu Mukherjee, director of the economic analysis and policy division of the UN Department of Economic and Social Affairs, stressed growing income inequality at a news conference launching the report. Between 2019 and 2021, he said, average incomes for the top 10% rose by 1.2% while the incomes of the lowest 40% fell by 0.5%.

“The top 10% now earns on average over 42 times what the lowest percentiles” earn, Mukherjee said.

The International Monetary Fund (IMF), which provides loans to needy countries, projected in October that global growth would slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023.

IMF Managing Director Kristalina Georgieva said at last week’s World Economic Forum (WEF) in Davos that 2023 will be a difficult year, but stuck by the projection and said “we don’t expect a global recession.”

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