The United Nations warns of a slowdown in global economic growth in 2024

“A long period of low growth looms on the horizon.” This is the conclusion of the new report issued by the United Nations Department of Economic and Social Affairs on global economic prospects, which expected that global economic growth during the current year would slow to 2.4 percent, compared to about 2.7 percent during the current year. last year and below pre-pandemic rates of 3 percent.

International Economy

During the past year, the global economy was able to avoid the worst scenario of recession, but new challenges, the most important of which are the escalation taking place in the Middle East and the occurrence of sea straits, made the possibility of it entering a long period of low growth greater.

The report explained that the continued rise in interest rates, the further escalation of conflicts, the slowdown in international trade, and the increase in climate disasters pose major challenges to global growth.

“We must build on the progress made last year towards stimulating the Sustainable Development Goals with at least $500 billion annually in affordable long-term financing for investments in sustainable development and climate action,” Guterres stressed.

The economic slowdown will hit developed and developing countries

The report expected growth in many major advanced economies, especially the United States, to slow in 2024 due to rising interest rates, a slowdown in consumer spending, and weak labor markets.

He also noted that the near-term growth prospects for many developing countries, particularly in East and West Asia, Latin America and the Caribbean, were also deteriorating due to tightening financial conditions, shrinking fiscal space, and slowing external demand.

Low-income and vulnerable economies face increasing balance of payments pressures and debt sustainability risks, according to the report.

He further emphasized that the economic prospects of small island developing States, in particular, are constrained by heavy debt burdens, high interest rates, and increasing climate-related vulnerabilities, which threaten to undermine and, in some cases, reverse gains made on the Sustainable Development Goals.

Inflation subsided

The UN report expected global inflation to decline further, from 5.7 percent in 2023 to 3.9 percent in 2024.

But he noted that price pressures remain high in many countries, and that any further escalation of geopolitical conflicts threatens renewed increases in inflation. The report explained that in about a quarter of all developing countries, annual inflation is expected to exceed 10 percent in 2024.

UN Under-Secretary-General for Economic and Social Affairs Li Junhua said in a press statement that the continued rise in inflation has led to a further decline in the progress made in eradicating poverty, with particularly serious implications for the least developed countries.

He stressed that "it is necessary that we work to strengthen global cooperation and the multilateral trading system, reform development financing, address debt challenges, and increase climate financing to help vulnerable countries accelerate towards a path of sustainable and inclusive growth."

Global labor markets

According to the report, global labor markets witnessed an uneven recovery from the Covid-19 pandemic crisis, while labor markets remained resilient despite the slowdown in growth in advanced economies. The report cautioned that in many developing countries, especially in West Asia and Africa, key employment indicators, including unemployment rates, have not yet returned to pre-pandemic levels.

He added that the global gender employment gap remains high, and gender pay gaps not only persist, but have also widened in some occupations.