The UN's 2024 World Financial State of affairs and Prospects (WESP) report sees world progress slowing from an estimated 2.7 % in 2023 to 2.4 % in 2024.
The flagship forecast launched in New York on Thursday indicated that stronger-than-expected GDP progress in 2023 as a result of COVID-19 pandemic masked short-term dangers and structural vulnerabilities within the world financial system.
The awful short-term outlook relies on persistently excessive rates of interest, additional escalation of battle, sluggish worldwide commerce and growing local weather disasters, all of which pose vital challenges to world progress.
It factors to a protracted interval of tighter credit score circumstances and better financing prices, creating sturdy headwinds for a debt-laden world financial system that wants extra funding to revive progress, combat local weather change and progress in the direction of the Sustainable Improvement Targets (SDGs).
“2024 have to be the yr we get out of this swamp.
“By mobilizing large, daring investments we will drive sustainable improvement and local weather motion and put the worldwide financial system on a stronger progress path for all,” mentioned UN Secretary-Normal António Guterres.
“We should construct on the progress revamped the previous yr towards an SDG enhance of no less than $500 billion per yr in reasonably priced, long-term financing for investments in sustainable improvement and local weather motion.”
In response to the report, world inflation is predicted to say no additional, from an estimated 5.7 % in 2023 to three.9 % in 2024.
It famous that value pressures are nonetheless excessive in lots of international locations and that any additional escalation of the geopolitical battle will contribute to this.
In a couple of quarter of all growing international locations, annual inflation is predicted to exceed 10 % by 2024, the report factors out.
Since January 2021, shopper costs in growing economies have risen by a complete of 21.1 %, considerably eroding financial beneficial properties from the COVID-19 restoration.
“Persistently excessive inflation has additional hampered progress in the direction of poverty eradication, with significantly critical penalties within the least developed international locations,” mentioned Li Junhua, head of the UN Division of Financial and Social Affairs (DESA).
“It’s crucial that we strengthen world cooperation and the multilateral buying and selling system, reform improvement finance, sort out debt challenges and scale up local weather finance to assist susceptible international locations speed up in the direction of a path of sustainable and inclusive progress.”
The USA, the world's largest financial system, is predicted to see a drop in GDP progress from 2.5 % in 2023 to 1.4 % in 2024.
Shopper spending, a key driver of the financial system, is prone to weaken as a result of a number of elements, together with excessive rates of interest and a weakening labor market, the report mentioned.
In the meantime, China, dealing with home and worldwide headwinds, is predicted to expertise a reasonable slowdown, with progress estimated at 4.7 % in 2024, down from 5.3 % final yr.
Europe and Japan additionally face challenges, with each areas forecast to see 1.2 % progress in 2024.
Nonetheless, the 2024 WESP report requires pressing motion to deal with these numerous challenges.
It emphasizes the necessity for strengthened world cooperation, particularly in areas comparable to local weather motion, financing sustainable improvement and addressing the debt sustainability challenges of low- and middle-income international locations. Higher world cooperation is crucial.