UN report predicts slower global economic growth for 2024

UN report predicts slower global economic growth for 2024

The UN World Economic Situation and Prospects 2024 report projects a slowdown in global economic growth, estimating a decrease from 2.7 percent in 2023 to 2.4 percent in 2024. Factors such as weakening global trade, high borrowing costs, elevated public debt, low investment, and geopolitical tensions pose risks to global growth. Developed economies, including the United States, are expected to experience deceleration in 2024 due to factors like high interest rates, slowing consumer spending, and weaker labor markets. Developing countries, particularly in East Asia, Western Asia, Latin America, and the Caribbean, face challenges from tighter financial conditions, reduced fiscal space, and sluggish external demand.

In the United States, despite exceeding expectations in 2023, economic growth is projected to be 1.4 percent in 2024, down from 2.5 percent in the previous year. The report highlights potential vulnerabilities, such as falling household savings, high interest rates, and a softening labor market, which may weaken consumer spending and investment. The European Union anticipates higher growth in 2024 (1.2 percent) compared to 2023 (0.5 percent), while Japan’s economy is expected to slow from 1.7 percent in 2023 to 1.2 percent in 2024. Developing economies are also forecasted to experience a slight drop in growth from 4.1 percent in 2023 to 4.0 percent in 2024.

The report underscores global challenges, including declining global inflation, uneven recovery in labor markets, and concerns about monetary tightening’s spillover effects on developing countries. It emphasizes the need for stronger international cooperation to stimulate growth, calling for avoiding fiscal consolidations and expanding fiscal support. The report also urges debt relief and restructuring for low and middle-income countries facing fiscal vulnerabilities. Additionally, it advocates for scaling up global climate finance and readjusting industrial policies to promote innovation and a green transition for sustainable development.

UN Secretary-General Antonio Guterres emphasizes the importance of 2024 as an opportunity to break out of economic challenges, calling for bold investments to drive sustainable development, climate action, and inclusive global economic growth. He stresses the need for an effective debt workout mechanism and a resilient global economy that works for everyone.

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