The post-pandemic global economy is still feeling the brunt of COVID-19
The long-term risks of stagnating growth, amid stubborn inflation, rising interest rates, and growing uncertainties, in addition to the ever-worsening impact of climate change, the report found.
Development is challenging
The current global economic outlook also presents an immediate challenge to delivering on the Sustainable Development Goals (SDGs), Li Junhua, Under Secretary General for the Department of Economic and Social Affairs (DESA).
“The international community must quickly face growing shortages of financing faced by many developing countries, strengthening their capacities to make the necessary investments in sustainable development and helping them transform their economies into achieve inclusive and long-term growth,” he said.
According to the report, the global economy is projected to grow by 2.3 percent in 2023 and 2.5 percent in 2024a slight increase in the global growth forecast for 2023, according to the report, which was made by DESA.
Local influence
In the United States, sensitive household spending has prompted an upward revision of the growth forecast to 1.1 percent in 2023.
Thanks to lower gas prices and strong consumer spending, the European Union’s economy is projected to grow by 0.9 percent. As a result of the lifted restrictions related to COVID-19, China’s growth in 2023 is now predicted to be 5.3 percent.
Sombre image lingers
Despite this rise, the growth rate is still below the average growth rate in the two years before the pandemic, of 3.1 per cent.
For many developing countries, growth prospects have deteriorated within tightening debt situation and the increased costs of external financing. In Africa and Latin America and the Caribbean, gross domestic product (GDP) per capita is projected to increase modestly this year, bucking a long-term trend of stagnating economic performance.
Least developed countries are predicted to grow by 4.1 percent in 2023 and 5.2 percent in 2024, far from the seven percent growth target set in the 2030 Agenda for Sustainable Development .
The world economy is under pressure due to geopolitical tensions, weakening global demand and fiscal and monetary policies. The volume of global trade in goods and services is forecast to grow by 2.3 per cent in 2023, well below the pre-pandemic trend.
Eggs for sale at a food market in Medellin, Colombia.
Harder high inflation
Inflation remains stubbornly high in many countries even as global food and energy prices fell sharply last year. Total Global inflation is projected at 5.2 percent in 2023, down from a two-decade high of 7.5 percent in 2022.
While high monetary pressures are expected to ease slowly, inflation in many countries will remain well above the central banks’ targets. Between local supply disruptionhigh import prices and product shortages, domestic food surpluses also rise in many developing countries, Inequality is affecting the poorespecially women and children.
Risks for developing countries
The rapid stabilization of global financial conditions poses major risks for many developing countries and economies in transition. Interest rates are risingcoupled with the shift in developed economies from quantitative easing to quantitative easing, has worsened debt vulnerabilities and further public financing options.
Current policy challenges call for strengthen cross-border cooperation policies and international solidarity actions to prevent many developing economies from becoming trapped in a vicious cycle of low growth and high debt.
A woman irrigates vegetables in a market garden created on previously virgin land in Ouallam, Niger. The garden is shared by refugees, displaced people and communities.
Job opportunities
Labor markets in the United States, Europe, and other developed economies have continued to show remarkable resilience, contributing to stability robust family finances. Amid widespread worker shortages and low unemployment rates, wage gains have risen.
Employment rates are at record highs in many developed economies with gender gaps narrowing since the pandemic.
Difference strong labor markets are, however, making it possible for the central bank to tame inflation. The Federal Reserve, the European Central Bank, and central banks in other developed countries have continued to raise interest rates in 2023, but at a slower pace than last year, which saw the most aggressive monetary tightening in decades.
The banking sector chaos in America and Europe has added new uncertainties and challenges for policy money.
Although quick and decisive actions by regulators help in financial stability risks, weaknesses in the global financial architecture and measures taken to contain them will hinder credit and investment growth going forward.
Shop workers sell bread at a bakery in Constantine, Algeria during the COVID-19 pandemic.
