Global economy predicted to grow by 1.9% in 2023: UN report

World production growth is projected to fall from an estimated 3.0 percent in 2022 to 1.9 percent in 2023, one of the lowest growth rates in decades, according to a UN report released Wednesday.

The UN World Economic Situation and Prospects 2023 report forecasts global growth to rise moderately to 2.7 percent in 2024, as some macroeconomic headwinds are expected to begin to subside next year.

Amid high inflation, aggressive monetary tightening and heightened uncertainty, the current downturn has slowed the pace of economic recovery from the COVID-19 crisis, threatening many countries, both developed and developing, with the prospect of recession in 2023, the report said.

He said that in 2022, the growth momentum in the US, European Union and other advanced economies has weakened significantly, negatively impacting the rest of the global economy through various channels.

Gross domestic product (GDP) in the United States is expected to increase by only 0.4 percent in 2023, after an estimated 1.8 percent growth in 2022, the report said.

Growth in China is expected to recover moderately in 2023. According to the report, China’s economic growth is projected to reach 4.8 percent in 2023 as the government adjusts its COVID policy and relaxes monetary and fiscal policies in late 2022.

It was pointed out that tightening global financial conditions together with a strong dollar exacerbated financial and debt vulnerabilities in developing countries.

Most developing countries saw a slower employment recovery in 2022 and continue to face significant employment abundance, according to the report.

He warned that slower growth, combined with rising inflation and rising debt vulnerabilities, threatens to further undermine hard-won achievements in sustainable development and deepen the already negative impact of current crises.

In 2022, the number of people facing acute food insecurity more than doubled compared to 2019, reaching nearly 350 million. The report highlights that a prolonged economic weakness and slow income growth will not only hinder poverty eradication, but will also constrain countries’ ability to invest more broadly in the 2030 Sustainable Development Goals (SDGs).

“Current crises hit the most vulnerable the hardest – often through no fault of their own. The global community needs to step up joint efforts to prevent human suffering and support an inclusive and sustainable future for all,” said UN undersecretary Li Junhua. The general manager of economic and social affairs made a statement regarding the publication of the report.

The report urged governments to avoid fiscal austerity policies that would stifle growth and disproportionately affect the most vulnerable groups, impact progress in gender equality and hinder development prospects for generations.

He recommended reallocating and reprioritizing public spending through direct policy interventions to create jobs and reinvigorate growth, noting that this would require strengthening social protection systems and providing sustained support through targeted and temporary subsidies, cash transfers and reductions in electricity bills. will be complemented by reductions in excise duties or customs duties.

“The pandemic, the global food and energy crises, climate risks and the looming debt crisis in many developing countries are pushing the limits of existing multilateral frameworks,” the report said. “International cooperation has never been more important in facing multiple global crises and getting the world back on track to achieve the Sustainable Development Goals.”

Additional SDG financing needs in developing countries vary by source, but are estimated to amount to several trillion US dollars per year, according to the report.

Stronger international commitment is urgently needed to expand access to emergency financial assistance, restructure and reduce debt burdens in developing countries, and increase SDG financing, according to the report.