The flagship study released in New York on Thursday highlighted the need for global collaboration to overcome economic risks and vulnerabilities. The report pointed to a period of tighter credit, higher borrowing costs, and escalating geopolitical conflict that could impede worldwide growth. UN Secretary-General António Guterres urged for “big, bold investments” to drive sustainable development and climate action.
The figures show a drop in global inflation from 5.7 per cent in 2023 to 3.9 per cent in 2024. However, in many countries, prices are still high, and inflation is expected to exceed 10 per cent in a quarter of all developing countries. Consumer prices in developing economies have risen by a cumulative 21.1 per cent since January 2021, eroding the economic gains made after the COVID-19 pandemic.
The US, the largest economy, is projected to see a drop in GDP growth from 2.5 per cent in 2023 to 1.4 per cent in 2024. China, meanwhile, is predicted to experience a moderate slowdown with growth estimated at 4.7 per cent in 2024, down from 5.3 last year. Europe and Japan also face challenges with growth rates forecasted at 1.2 per cent for both regions in 2024.
The least developed countries are projected to grow by 5 per cent in 2024, yet this falls short of the 7 per cent growth target under the SDGs. The global labour market presents a mixed picture, with developed countries experiencing a robust recovery and developing countries showing mixed progress.
Investment growth has slowed across both developed and developing economies, and international trade is losing steam as a growth driver. Developing countries also face high levels of external debt and rising interest rates, making access to international capital markets difficult.
2023 saw extreme weather worsen, including the hottest summer on record since 1880 leading to wildfires, floods, and droughts worldwide. These events have direct economic impacts, such as damage to infrastructure, agriculture, and livelihoods.
The report calls for urgent action to address these challenges, emphasizing the need for strengthened global cooperation in areas like climate action, sustainable development financing, and addressing the debt sustainability challenges of low and middle-income countries.