The mid-year update predicts growth for 2019 will be 2.7%, down from 3.4% in 2018.
The mid-year WESP cautions that the predicted slowdown puts investments in health, education and climate action at risk.
The report observes that further progress on SDG 1 will require effective management of urbanization, and it recommends a strengthened, more coordinated multilateral approach to global climate policy, including the use of carbon pricing.
21 May 2019: The UN Department of Economic and Social Affairs (DESA) has reported that a broad-based growth slowdown in the global economy poses challenges for implementing the SDGs, particularly SDG 1 (no poverty). The mid-year World Economic Situation and Prospects (WESP) report follows on WESP 2019, released in January.
WESP 2019 predicted that the global economy would grow by 3% in 2019 and 2020. The mid-year report, titled ‘WESP as of mid-2019,’ revises the January forecast further downwards. The mid-year update predicts that growth for 2019 will be 2.7%, down from 3.4% in 2019. The mid-year WESP cautions that the predicted slowdown puts at risk investments in health, education and climate action. The report also identifies potential scenarios that could result in a more prolonged or sharper slowdown in the global economy: if the effects of climate change accelerate, trade tensions escalate further or financial considerations suddenly deteriorate.
The report calls for carbon pricing to include environmental costs of consumption and production in economic decision-making.
On SDG 1, the report finds that weaker macroeconomic outlook has decreased prospects for poverty eradication, while weaker global growth and heightened international policy uncertainty have “reinforced concerns that SDG 1 is increasingly out of reach.” Several large developing countries remain trapped on a low growth path or are struggling to recover from recession, and several parts of Africa, Latin America and the Caribbean and Western Asia are expected to have very weak per capita income growth. For example, in the Democratic Republic of the Congo, Mozambique and Nigeria the total number of people in extreme poverty has risen since 2014. In Latin America and the Caribbean, the rate of extreme poverty “edged up” between 2014 and 2017.
The report observes that while poverty remains “predominantly rural,” further progress on SDG 1 will require effective management of urbanization. Africa and South Asia, the two regions with the highest number of people in poverty, are also those anticipated to have the most rapid pace of urbanization over the next two decades.
On climate change and natural disasters, the authors report that climate change is continuing to cause more intense and frequent natural disasters that disproportionately affect the most vulnerable economies. The report recommends a strengthened, more coordinated multilateral approach to global climate policy, including the use of carbon pricing. The report calls for carbon pricing to force governments and the private sector to include the environmental costs of consumption and production in their economic decision-making.
UN Chief Economist Elliott Harris said it will be critical to implement policies that “look beyond GDP growth and identify … measures of economic performance that appropriately reflect the costs of inequality, insecurity and climate change.” [DESA Statement] [DESA Press Release] [UN News Story] [Publication Webpage] [Publication: WESP as of mid-2019] [SDG Knowledge Hub Story on WESP 2019 Release]