The UN published a new report «World Economic Situation and Prospects 2024» with the help of which we try to predict how the year 2024 will take place from an economic point of view on a global level. And unfortunately, the outlook is not too rosy for the UN either. The prospectus predicts a slowdown in global growth, increasing from an estimated 2.7% in 2023 to 2.4% in 2024. Compared to pre-pandemic figures of around 3%, this is an increasingly downward trend.
What will slow global growth
Among the reasons that will slow down economic growth, we can find geopolitical tensions with deepening conflicts especially in Ukraine and Israel, still high interest rates, a slowdown in international trade and an increase in climate disasters. All causes that pose significant challenges to global growth.
Unfortunately, the rise interest rates which is likely to persist until 2024, will slow economic growth especially in advanced economies such as the United States, where growth will slow precisely because of high rates. However, tighter financial conditions are also slowing growth in developing economies, particularly in East Asia, West Asia, Latin America and the Caribbean.
The good news is thatinflation it is expected to decline further through 2024: from an estimated 5.7% in 2023 to 3.9% this year. However, the report suggests that we still need to be vigilant as price pressures remain high and any further escalation of geopolitical conflicts risks a resumption of inflation. Since January 2021, consumer prices in developing economies have increased by an overall 21.1%, significantly eroding economic gains made following the post-Covid-19 recovery.
Since the post-pandemic recovery, the report highlights how the global labor market is unevenly distributed. While countries such as China, Brazil, Turkey and Russia report falling unemployment, globally the gender gap is widening and youth unemployment is high.
Then there’s the problem climate change. 2023 saw the hottest summer since 1880, bringing fires, floods and droughts around the world. These events had a major economic impact on agriculture and infrastructure. Studies have predicted significant losses to the global economy due to climate change.
While developed countries continue to channel investment into sustainable and technological sectors such as renewable energy and digital infrastructure, developing countries face challenges such as capital flight and reduced foreign direct investment.
Necessary according toUnited Nations greater international cooperation between different states to stimulate growth and support the green transition. «Reducing – and eventually eliminating – fossil fuel subsidies, building on international financial commitments such as the $100 billion pledge to support developing countries, and promoting technology transfer are key to strengthening global climate action.“, it reads.
When presenting a message WESP 2024the UN Secretary General António Guterreshowever, he sought to instill confidence in the future by hoping that 2024 would be the year when we finally emerge from this difficult moment economically. «By unleashing big and bold investments, we can advance sustainable development and climate action and set the global economy on a path of stronger growth for all“, he said.