The United Nations reported Thursday that the global economic outlook has improved since its January forecast, noting improved prospects for several major emerging economies, including the United States, Brazil, India and Russia.
The global economy is projected to grow 2.7% this year, according to the mid-2024 report, up from a 2.4% forecast in the January report, and 2.8% in 2025. The 2.7% growth rate is on par with 2023's growth rate but lower than the 3% growth rate before the COVID-19 pandemic began in 2020.
“Our projections are cautiously optimistic, but come with an important caveat,” Shantanu Mukherjee, director of the U.N.'s Department of Economic Analysis and Policy, said at a news conference to launch the report.
The report noted prolonged periods of high interest rates, debt repayment challenges, ongoing geopolitical tensions and climate risks, particularly for the world's poorest countries and small island states.
Mukherjee said inflation, which has fallen from a 2023 peak, is “both a sign of underlying vulnerabilities” in the global economy that remain lurking and “a cause for concern in itself.”
“We know that inflation remains elevated in some countries,” he said. “Globally, energy and food prices have inched up in recent months, but I think what's more sinister is that inflation in many advanced economies is running above central bank targets of 2 percent.”
The UN's projection for 2024 is lower than those of the International Monetary Fund and the Organisation for Economic Cooperation and Development.
In mid-April, the IMF projected that the global economy would continue to grow at the same pace as in 2023, at 3.2% in 2024 and 2025, while the OECD projected growth of 3.1% in 2024 and 3.2% in 2025 in early May.
The latest UN forecasts see US growth rising to 2.3% in 2024 from the 1.4% forecast at the beginning of the year, while China's is expected to rise slightly to 4.8% from 4.7% in January.
Despite climate risks, the UN Department of Economic and Social Affairs report projects economic growth in small island developing states to improve from 2.4 percent in 2023 to 3.3 percent in 2024, mainly due to a recovery in tourism.
On the negative side, the report projects Africa's economic growth to slow to 3.3 percent in 2024, down from a forecast 3.5 percent at the start of the year. The report also notes weak prospects for the continent's largest economies, Egypt, Nigeria and South Africa, and that seven African countries are in “debt distress” and 13 others are at “high risk of debt distress.”
Regarding the downward revision of Africa's outlook, Mukherjee said, “Africa is home to some 430 million people living in extreme poverty and accounts for nearly 40 percent of the world's undernourished people,” and “Two-thirds of the high-inflation countries listed in this latest report are located in Africa.”
He said the situation was “less dire” for developing countries, but the continued slowdown and sharp decline in investment growth was a key concern.
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