The United Nations has reported an improved outlook for the world economy in its mid-2024 report, with projected growth of 2.7% this year and 2.8% in 2025. This is up from the January forecast of 2.4% for 2024. The report highlights better prospects in the United States, Brazil, India, and Russia, indicating a trend towards recovery from the impacts of the COVID-19 pandemic. However, there are still concerns about interest rates, debt repayment challenges, geopolitical tensions, and climate risks, especially for the poorest countries and small island nations.
Inflation remains a significant concern, with some countries experiencing high inflation rates above central bank targets. The global economy is still fragile in certain areas, and rising energy and food prices are contributing to inflationary pressures. The U.N. acknowledges that inflation is both a symptom of underlying economic issues and a cause for concern on its own. Despite some improvements, inflation continues to pose challenges for many developed countries, requiring careful monitoring and management by policymakers.
The U.N.’s forecast for 2024 is slightly lower than that of other organizations, with the International Monetary Fund and the Organization for Economic Cooperation and Development predicting higher growth rates. The IMF forecasted a 3.2% growth rate for 2024 and 2025, while the OECD projected 3.1% growth in 2024 and 3.2% in 2025. The U.N.’s estimates show 2.3% growth for the United States and a slight increase for China, indicating a mixed outlook for the world’s largest economies.
The report also addresses specific regions, with small developing island nations expected to see improved economic growth in 2024 due to a rebound in tourism. However, economic growth in Africa is projected to be lower than initially forecasted, with weak prospects in major economies like Egypt, Nigeria, and South Africa. Additionally, several African countries are facing debt distress, posing further challenges to economic stability in the region. The U.N. emphasizes the need for targeted interventions to address these issues and support sustainable development in Africa.
While developing countries have not been as severely impacted, there are concerns about declining investment growth. The U.N. warns that this trend could have long-term consequences for these economies, impacting their ability to recover and grow in the future. As such, policymakers need to focus on stimulating investment and promoting economic resilience to ensure sustainable development and poverty reduction in developing countries.
Overall, the U.N.’s mid-2024 report reflects a sense of guarded optimism for the world economy, citing improved prospects in several key economies. However, challenges such as inflation, debt repayment, geopolitical tensions, and climate risks continue to pose significant risks to global economic stability. Addressing these challenges will require coordinated efforts from policymakers, international organizations, and other stakeholders to support inclusive and sustainable growth in the years ahead.
