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UN / WORLD ECONOMIC SITUATION PROSPECTS 2024
STORY: UN / WORLD ECONOMIC SITUATION PROSPECTS 2024
TRT: 3:20
SOURCE: UNIFEED
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 04 JANUARY 2023, NEW YORK CITY / FILE
FILE – NEW YORK CITY
1.Wide shot, exterior, United Nations Headquarters
04 JANUARY 2023, NEW YORK CITY
2.Wide shot, press briefing room
3.SOUNDBITE (English) Hantanu Mukherjee, Director of the Economic Analysis and Policy Division, UN DESA:
“Our report finds that global growth for 2023 will turn out to be at around 2.7 percent, which is up from 2.3 percent that we were expecting in May 2023.But our forecast for 2024 is lower down to 2.4 percent. In a nutshell, the world is struggling to get back to the 3.0 percent annual average from 2019 presenting years of subpar growth.”
4. Wide shot, press briefing room
5. SOUNDBITE (English) Hantanu Mukherjee, Director of the Economic Analysis and Policy Division, UN DESA:
“Overall, developing economies growth remains pretty static at about 4 percent over 2020 to [20]25. A little higher for LDCs but still well below the SDG target of at least 7 percent.
6. Wide shot, press briefing room
7. SOUNDBITE (English) Hantanu Mukherjee, Director of the Economic Analysis and Policy Division, UN DESA:
“Across the world, inflation is expected to be at an average of 3.9 percent in 2024. A decline of about a third from last year. And that is a rapid change, back in 2022, we were seeing 8.1 percent.”
8. Wide shot, press briefing room
9. SOUNDBITE (English) Hantanu Mukherjee, Director of the Economic Analysis and Policy Division, UN DESA:
“And about a quarter of all developing countries, the annual inflation forecast for 2024 is over 10 percent. That will be eroding away what people's earnings can buy and inflicting further pain, especially on the middle class, people in poverty and hunger will continue to be a special concern, because local food price inflation remains high in many developing countries, and this is a situation which could easily be aggravated by shocks to domestic food production or even to the global food supply.”
10. Wide shot, press briefing room
11. SOUNDBITE (English) Hantanu Mukherjee, Director of the Economic Analysis and Policy Division, UN DESA:
“So fiscal space remains limited across most countries, but can be especially constraining for developing countries. More than 50 developing economies spent more than 10 percent of their revenues on interest, and 25 spend as much as 20 percent. That restricted their capacity to respond to shocks or to provide essential services, like education and healthcare.”
12. Wide shot, press briefing room
13. SOUNDBITE (English) Hamid Rashid, Chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN DESA:
“We need stronger international cooperation. And this is an imperative at this stage because without international cooperation, we cannot really revive global trade. Global trade has been slumping for some time now. So we will need strong international commitment to revive global trade flows and making the WTO and other trade mechanisms, rule-based trading system has to be fully equipped and fully empowered to support global trade and trade flows.”
14. Wide shot, press briefing room
15. SOUNDBITE (English) Hamid Rashid, Chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN DESA:
“We are at a critical stage in terms of our goal for achieving the SDGs and SDG financing has to be scaled up, not just at the domestic level but also internationally, there has to be far more resources made available to address climate risks, climate adaptation and climate mitigation.”
16. Wide shot, press briefing room
Global economic growth is projected to slow from an estimated 2.7 percent in 2023 to 2.4 per cent in 2024, trending below the pre-pandemic growth rate of 3.0 per cent, according to the United Nations World Economic Situation and Prospects (WESP) 2024 report.
At the launch of the report today (04 Jan), Hantanu Mukherjee, Director of the Economic Analysis and Policy Division and Hamid Rashid, Chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN DESA, spoke to reporters in New York. .
This latest forecast comes on the heels of global economic performance exceeding expectations in 2023. However, last year’s stronger-than-expected GDP growth masked short-term risks and structural vulnerabilities.
The UN’s flagship economic report presents a sombre economic outlook for the near term. Persistently high interest rates, further escalation of conflicts, sluggish international trade, and increasing climate disasters, pose significant challenges to global growth.
The prospects of a prolonged period of tighter credit conditions and higher borrowing costs present strong headwinds for a world economy saddled with debt, while in need of more investments to resuscitate growth, fight climate change and accelerate progress towards the Sustainable Development Goals (SDGs).
“2024 must be the year when we break out of this quagmire. By unlocking big, bold investments we can drive sustainable development and climate action, and put the global economy on a stronger growth path for all,” said António Guterres, United Nations Secretary- General. “We must build on the progress made in the past year towards an SDG Stimulus of at least $500 billion per year in affordable long-term financing for investments in sustainable development and climate action.”
Subdued growth in developed and developing economies Growth in several large, developed economies, especially the United States, is projected to decelerate in 2024 given high interest rates, slowing consumer spending and weaker labour markets. The short-term growth prospects for many developing countries – particularly in East Asia, Western Asia and Latin America and the Caribbean – are also deteriorating because of tighter financial conditions, shrinking fiscal space and sluggish external demand. Low-income and vulnerable economies are facing increasing balance-of-payments pressures and debt sustainability risks. Economic prospects for small island developing States, in particular, will be constrained by heavy debt burdens, high interest rates and increasing climate-related vulnerabilities, which threaten to undermine, and in some cases, even reverse gains made on the SDGs.
Inflation trending down but recovery in labour markets still uneven.
Global inflation is projected to decline further, from an estimated 5.7 per cent in 2023 to 3.9 per cent in 2024. Price pressures are, however, still elevated in many countries and any further escalation of geopolitical conflicts risks renewed increases in inflation.
In about a quarter of all developing countries, annual inflation is projected to exceed 10 percent in 2024, the report highlights. Since January 2021, consumer prices in developing economies have increased by a cumulative 21.1 per cent, significantly eroding the economic gains made following the COVID-19 recovery. Amid supply-side disruptions, conflicts and extreme weather events, local food price inflation remained high in many developing economies, disproportionately affecting the poorest households.
“Persistently high inflation has further set back progress in poverty eradication, with especially severe impacts in the least developed countries,” said Li Junhua, United Nations Under-Secretary-General for Economic and Social Affairs. “It is absolutely imperative that we strengthen global cooperation and the multilateral trading system, reform development finance, address debt challenges and scale up climate financing to help vulnerable countries accelerate towards a path of sustainable and inclusive growth.”
According to the report, the global labour markets have seen an uneven recovery from the pandemic crisis. In developed economies, labour markets have remained resilient despite a slowdown in growth. However, in many developing countries, particularly in Western Asia and Africa, key employment indicators, including unemployment rates, are yet to return to pre- pandemic levels. The global gender employment gap remains high, and gender pay gaps not only persist but have even widened in some occupations.
Stronger international cooperation needed to stimulate growth and promote green transition Governments will need to avoid self-defeating fiscal consolidations and expand fiscal support to stimulate growth at a time when global monetary conditions will remain tight. Central banks around the world continue to face difficult trade-offs in striking a balance between inflation, growth and financial stability objectives. Developing country central banks, in particular, will need to deploy a broad range of macroeconomic and macroprudential policy tools to minimize the adverse spillover effects of monetary tightening in developed economies.
Furthermore, the report emphasizes that robust and effective global cooperation initiatives are urgently needed to avoid debt crises and provide adequate financing to developing countries. Low-income countries and middle-income countries with vulnerable fiscal situations need debt relief and debt restructuring to avoid a protracted cycle of weak investment, slow growth and high debt-servicing burdens.
In addition, global climate finance must be massively scaled up. Reducing – and eventually eliminating – fossil fuel subsidies, following through on international financing commitments, such as the $100 billion pledge to support developing countries, and promoting technology transfer are critical for strengthening climate action worldwide. It also underscores the ever- increasing role of industrial policies to bolster innovation and productive capacity, build resilience and accelerate a green transition.
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