Global economic growth will slow to 1.9% in 2023: UN – National | 24CA News

The United Nations forecast Wednesday that international financial progress will fall considerably to 1.9% this 12 months because of the meals and vitality disaster sparked by the battle in Ukraine, the continuing affect of the COVID-19 pandemic, persistently excessive inflation and the local weather emergency.

Painting a dark and unsure financial outlook, the U.N. Department of Economic and Social Affairs mentioned the present international financial slowdown “cuts across both developed and developing countries, with many facing risks of recession in 2023.”

“A broad-based and severe slowdown of the global economy looms large amid high inflation, aggressive monetary tightening, and heightened uncertainties,” U.N. Secretary-General Antonio Guterres mentioned in a foreword to the 178-page report.

The report mentioned this 12 months’s 1.9% financial progress forecast _ down from an estimated 3% in 2022 _ is likely one of the lowest progress charges in current many years. But it tasks a average pick-up to 2.7% in 2024 if inflation regularly abates and financial headwinds begin to subside.

In its annual report earlier this month, the World Bank which lends cash to poorer international locations for growth tasks, reduce its progress forecast almost in half, from earlier projection of three% to simply 1.7%.

The International Monetary Fund, which supplies loans to needy international locations, projected in October that international progress would gradual from 6% in 2021 to three.2% in 2022 and a pair of.7% in 2023. IMF Managing Director Kristalina Georgieva mentioned finally week’s World Economic Forum in Davos that 2023 will likely be a troublesome 12 months, however caught by the projection and mentioned “we don’t expect a global recession.”

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According to the U.N. report, this 12 months “growth momentum has weakened in the United States, the European Union and other developed economies, adversely affecting the rest of the world economy.”

In the United States, GDP is projected to develop by solely 0.4% in 2023 after estimated progress of 1.8% in 2022, the U.N. mentioned. And many European international locations are projected to expertise “a mild recession” with the battle in Ukraine heading into its second 12 months on Feb. 14, excessive vitality prices, and inflation and tighter monetary situations miserable family consumption and funding.

The economies within the 27-nation European Union are forecast to develop by simply 0.2% in 2023, down from an estimated 3.3% in 2022, the U.N. mentioned. And within the United Kingdom, which left the EU three years in the past, GDP is projected to contract by 0.8% in 2023, persevering with a recession that started within the second half of 2022, it mentioned.

With China’s authorities abandoning its zero-COVID coverage late final 12 months and easing financial and monetary insurance policies, the U.N. forecast that its financial system, which expanded by solely 3% in 2022, will speed up to 4.8% this 12 months.

“But the reopening of the economy is expected to be bumpy,” the U.N. mentioned. ”Growth will possible stay properly beneath the pre-pandemic price of 6-6.5%.”

The U.N. report mentioned Japan’s financial system is anticipated to be among the many better-performing amongst developed international locations this 12 months, with GDP forecast to extend by 1.5%, barely decrease than final 12 months’s estimated progress of 1.6%.

Across east Asia, the U.N. mentioned financial restoration stays fragile although GDP progress in 2023 is forecast to succeed in 4.4%, up from 3.2% final 12 months, and stronger than in different areas.

In South Asia, the U.N. forecast common GDP progress will gradual from 5.6% final 12 months to 4.8% this 12 months because of excessive meals and vitality costs, “monetary tightening and fiscal vulnerabilities.”

But progress in India, which is anticipated to overhaul China this 12 months because the world’s most populous nation, is anticipated to stay robust at 5.8%, barely decrease than the estimated 6.4% in 2022, “as higher interest rates and a global slowdown weigh on investments and exports,” the U.N. report mentioned.

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In Western Asia, oil-producing international locations are benefiting from excessive costs and rising output in addition to a revival in tourism, the U.N. mentioned. But economies that aren’t oil producers stay weak “given tightening access to international finance and severe fiscal constraints,” and common progress within the area is projected to gradual from an estimated 6.4% in 2022 to three.5% this 12 months.

The U.N. mentioned Africa has been hit “by multiple shocks, including weaker demand from key trading partners (especially China and Europe), a sharp increase in energy and food prices, rapidly rising borrowing costs and adverse weather events.”

One outcome, it mentioned, is mounting debt-servicing burdens which have pressured a rising variety of African governments to hunt bilateral and multilateral help.

The U.N. projected financial progress in Africa to gradual from an estimated 4.1% in 2022 to three.8% this 12 months.

In Latin America and the Caribbean, the U.N. mentioned the outlook “remains challenging,” citing labor market prospects, stubbornly excessive inflation and different points. It forecast that regional progress will gradual to simply 1.4% in 2023 from an estimated enlargement of three.8% in 2022.

“The region’s largest economies _ Argentina, Brazil and Mexico _ are expected to grow at very low rates due to tightening financial conditions, weakening exports, and domestic vulnerabilities,” the U.N. mentioned.

For the world’s least developed international locations, the U.N. mentioned progress is projected at 4.4% this 12 months, about the identical as final 12 months however considerably beneath the UN’s goal of seven% by 2030.