Global economy expected to grow 1.9% in 2023: UN report

Xinhua reported that the United Nations Report on the World Economic Situation and Prospects for 2023, launched on Wednesday, projected global growth to pick up moderately to 2.7 percent in 2024, when some headwinds are expected to kick in for the economy. The total decline next year.

The report said that amid high inflation rates, severe monetary tightening and increasing uncertainties, the current slowdown has slowed the pace of economic recovery from the Covid-19 crisis, threatening many countries – both developed and developing – with prospects of recession in 2023.

It said significantly weaker growth momentum in the United States, the European Union and other advanced economies in 2022, negatively impacting the rest of the global economy through a number of channels.

The report said that the gross domestic product in the United States is expected to expand by only 0.4 percent in 2023 after an estimated growth of 1.8 percent in 2022.

China’s growth is expected to improve moderately in 2023. With the government adjusting its policy on COVID in late 2022 and easing monetary and fiscal policies, China’s economic growth is expected to accelerate to 4.8 percent in 2023, according to the report.

He pointed out that the tightening of global financial conditions, coupled with the strength of the dollar, exacerbates financial vulnerabilities and debts in developing countries.

The report said most developing countries saw a slower job recovery in 2022 and are still facing significant stagnation in employment.

He warned that slowing growth, coupled with rising inflation and growing debt vulnerabilities, threatens to further undo hard-won achievements in sustainable development, deepening the already negative effects of the current crises.

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

Li Junhua, UN Under-General for Economic and Social Affairs, said in a statement on the release of the report.

The report called on governments to avoid fiscal austerity that would stifle growth and disproportionately affect the most vulnerable, affect progress on gender equality and hinder development prospects across generations.

It recommended reallocating and reprioritizing public expenditures through direct policy interventions that will create job opportunities and stimulate growth, noting that this will require strengthening social protection systems, and ensuring continued support through targeted and temporary subsidies, cash transfers, and discounts on utility bills, which can be supplemented by reductions in consumption taxes or customs duties.

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

Additional financing needs for the SDGs in developing countries vary by source, but are estimated to be in the order of a few trillion US dollars annually, according to the report.

The report said stronger international commitment is urgently needed to expand access to emergency financial assistance, debt restructuring and relief across developing countries, and broadening financing for the Sustainable Development Goals.

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