The post-pandemic global economy is still feeling the impact of COVID-19

Amid stubborn inflation, rising interest rates and heightened uncertainty, in addition to the ever-worsening impact of climate change, the long-term risks of low growth, Report detected.

Challenging development

The current global economic outlook poses an immediate challenge to providing that Sustainable Development Goals (SDGs), said Li Junhua, Under-Secretary-General for the Department of Economic and Social Affairs (Village)

„We want a global community The growing deficit must be addressed immediately The financing many developing countries face is strengthening their capacities to make critical investments in sustainable development and helping transform their economies To achieve inclusive and sustainable long-term development,” he said.

According to the report, the global economy is now projected to grow 2.3 percent in 2023 and 2.5 percent in 2024A slight rise in the global growth forecast for 2023, according to a report prepared by DESA.

Regional impact

In the United States, resettlement spending has prompted an upward revision of the growth forecast to 1.1 percent in 2023.

The EU’s economy is now forecast to grow by 0.9 percent, driven by lower gas prices and stronger consumer spending. Because of this COVID-19 Deregulated, China’s growth is projected to be 5.3 percent in 2023.

The somber picture continues

Despite this rise, the growth rate is still lower than the average growth rate of 3.1 percent in the two decades before the pandemic.

For many developing countries, growth prospects have deteriorated among others Tightening credit conditions And the costs of external financing are increasing. In Africa and Latin America and the Caribbean, gross domestic product (GDP) per capita is forecast to increase only marginally this year, reinforcing the long-term trend. Stagnant economic performance.

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LDCs are projected to grow at 4.1 percent in 2023 and 5.2 percent in 2024, well below the set seven percent growth target. 2030 Agenda for Sustainable Development.

Global trade is under pressure Due to geopolitical tensions, weak global demand and tight monetary and fiscal policies. The volume of global trade in goods and services is projected to grow by 2.3 percent in 2023, below the pre-pandemic trend.

Eggs for sale at the food market in Medellín, Colombia.

Persistently high inflation

Although international food and energy prices have fallen significantly over the past year, inflation has remained stubbornly high in many countries. Average Global inflation is forecast at 5.2 percent in 2023, down from a two-decade high of 7.5 percent in 2022.

Although upward price pressures are expected to ease slowly, inflation remains above central banks’ targets in many countries. in the middle Local supply disruptionsDue to high import costs and market imperfections, domestic food inflation is still high in most developing countries. disproportionately affects the poorEspecially women and children.

Risk to developing countries

The rapid tightening of global financial conditions poses major risks of transition for many developing countries and economies. Rising interest ratesThis, coupled with the shift from quantitative easing to quantitative tightening in advanced economies, has exacerbated credit vulnerabilities and further constrained public spending options.

Current policy challenges require Strong cross-border policy cooperation and concerted global action to prevent many developing economies from falling into a vicious cycle of low growth and high debt.

labor gains

Labor markets in the United States, Europe, and other developed economies continue to show significant resilience, contributing to sustained growth. Strong household spending. Amid widespread labor shortages and low unemployment rates, wage gains have picked up.

As gender gaps narrow since the pandemic, employment rates are at record highs in many developed economies.

Exceptionally Strong labor markets However, central banks are finding it difficult to control inflation. The Federal Reserve, the European Central Bank and central banks in other developed countries followed suit Raise interest rates In 2023, but at a slower pace than last year, it saw the most aggressive monetary tightening in decades.

The turmoil in the banking sector in the US and Europe has also increased New uncertainties and challenges For monetary policy.

While swift and decisive actions by regulators help curb financial stability risks, Vulnerabilities in the Global Financial Framework And the measures taken to control them will reduce credit and investment growth.

Shop workers sell bread at a bakery in Constantine, Algeria during the COVID-19 pandemic.

ILO Photo/Yasin Imadalo

Shop workers sell bread at a bakery in Constantine, Algeria during the COVID-19 pandemic.

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