UN Predicts Global Economy Down to 2.4% in 2024, Inflation Rises to Above 10% for Developing Countries

• 11 January 2024
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In a pivotal economic report, the United Nations projects a slowdown in global economic growth to 2.4% by 2024, down from the estimated 2.7% in 2023, underscoring challenges surpassing earlier expectations. Both figures remain below the pre-pandemic 3% growth rate prevalent before the 19-year epidemic in 2020, according to VOA on 9 January 2024.

The UN’s forecast diverges from those of the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD), with the IMF anticipating a global economic growth slowdown to 3% by 2023 and 2.9% by 2024. Meanwhile, the OECD estimates a decline from 2.9% in 2023 to 2.7% in 2024, based on its late November projections last year.

Titled “Global Economic Situation and Outlook 2024,” the UN report emphasizes tightening credit conditions over time, posing challenges for long-term borrowing and increasing borrowing costs. This is particularly concerning for the heavily indebted global economy, affecting poorer developing countries and those reliant on investment for growth.

Shantanu Mukherjee, the UN’s Director of Economic Analysis and Policy, expressed cautious optimism, noting the avoidance of a 2023 recession, largely attributed to the United States’ ability to maintain high inflation without hindering economic momentum. However, he emphasized that global risks persist, stating, “We are still not out of danger. Potential inflation risks due to unresolved global situations, citing supply chain disruptions and challenges in fuel supply and distribution. These factors could trigger further rate hikes, complicating the economic landscape.”

Global inflation, projected at 8.1% in 2022, is expected to decrease to 5.7% in 2023 and further to 3.9% in 2024. However, about a quarter of all developing countries may experience annual inflation exceeding 10% in the current year.

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