The report warns of subdued growth in developed and developing countries alike.
The report also projects global inflation to continue to decline, from an estimated 5.7% in 2023 to 3.9% in 2024, but notes that since January 2021, consumer prices in developing economies have increased by a cumulative 21.1%.
The UN Department of Economic and Social Affairs (DESA) issued the 2024 edition of its flagship World Economic Situation and Prospects (WESP) report, which projects global economic growth to further slow down from an estimated 2.7% in 2023 to 2.4% in 2024, continuing to trend below the pre-pandemic growth rate of 3%. The report calls for stronger international cooperation to stimulate growth and promote green transition.
While global economic performance exceeded expectations in 2023, the report calls attention to short-term risks and structural vulnerabilities masked by stronger-than-expected gross domestic product (GDP) growth. “Persistently high interest rates, further escalation of conflicts, sluggish international trade, and increasing climate disasters, pose significant challenges to global growth,” a DESA press release notes.
The report warns of subdued growth in developed and developing countries alike. For example, growth in the US, as well as several other large, developed economies, is expected to decelerate in 2024 due to high interest rates, reduced consumer spending, and weaker labor markets. In many developing countries in East Asia, Western Asia, and Latin America and the Caribbean (LAC), tighter financial conditions, shrinking fiscal space, and sluggish external demand are weakening growth prospects. The report also flags that heavy debt burdens, high interest rates, and increasing climate-related vulnerabilities are projected to further constrain economic prospects for small island developing States (SIDS), undermining, and in some cases threatening to reverse, progress on the SDGs.
In a foreword to the report, UN Secretary-General António Guterres outlined the need to “unlock[] big, bold investments [that] can drive sustainable development and climate action, and put the global economy on a stronger growth path for all.” He called for an SDG Stimulus of at least USD 500 billion per year in “affordable long-term financing for investments in sustainable development and climate action” and highlighted the Summit of the Future in September 2024 as an opportunity to advance reforms of the international financial system.
The report also projects global inflation to continue to decline, from an estimated 5.7% in 2023 to 3.9% in 2024, but notes that since January 2021, consumer prices in developing economies have increased by a cumulative 21.1%, and annual inflation in a quarter of developing countries is projected to exceed 10% in 2024.
“Persistently high inflation has further set back progress in poverty eradication, with especially severe impacts in the least developed countries” (LDCs), said UN Under-Secretary-General for Economic and Social Affairs Li Junhua, stressing the need for strengthening global cooperation and the multilateral trading system (MTS). He also called for reform of development finance, addressing debt challenges, and scaling up climate financing “to help vulnerable countries accelerate towards a path of sustainable and inclusive growth.”
Recovery in labor markets will also remain uneven, according to the report. While labor markets in developed economies have been resilient despite a slowdown in growth, key employment indicators in many developing countries, particularly in Western Asia and Africa, have not yet returned to pre-pandemic levels.
The report recommends that governments expand fiscal support to stimulate growth amid tight global monetary conditions. It emphasizes the need for robust and effective global cooperation initiatives “to avoid debt crises and provide adequate financing to developing countries.” Scaled up climate finance, and industrial policies to bolster innovation and productive capacity, build resilience, and accelerate a green transition are also among the recommendations.
The World Economic Situation and Prospects 2023 was released on 4 January. DESA developed the report in partnership with the UN Conference on Trade and Development (UNCTAD) and the five UN regional commissions. The UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS) and the UN World Tourism Organization (UNWTO) also contributed to the report. [Publication: World Economic Situation and Prospects 2024] [Publication Landing Page] [Executive Summary] [DESA Press Release] [DESA News Release] [UN News Story] [SDG Knowledge Hub Story on World Economic Situation and Prospects 2023]