The primary author of the World Economic Situations and Prospects mid-year update, which is the flagship report from DESA released on 16 May, discusses the main findings in an interview with UN News.
During the launch of the report, it was mentioned that the US Federal Reserve focuses on “personal consumption expenditure inflation” which includes rent and “imputed rent” (the amount homeowners would pay if they were renting). These numbers change slowly, making it difficult for inflation to decrease quickly.
Although some developing countries still have high inflation rates, the overall trend is positive.
UN News asks about the impact of conflict on the global economy, citing the ongoing war in Ukraine and the recent war in Gaza. The author explains that while there may be temporary spikes in commodity prices, the global market is able to respond efficiently and alternative sources are emerging.
UN News then turns to the impact of COVID-19 on the global economy. The author notes that while there may be a sharp rebound in 2021, it is an illusion due to the “base effect” and the global economy has not returned to its pre-pandemic trajectory. The author also mentions that trade, a major driver of economic growth, is still not back to normal.
When asked about the effects of austerity measures and public spending cuts, the author emphasizes the importance of government spending in keeping the economic momentum going and attracting private investment.
The UN is urging the international community to transition to a more sustainable economy, but the report warns of a potential “resource curse” if countries do not have the right policies in place. The author suggests that countries can avoid this consequence by focusing on adding value to their mineral resources through innovation and industrial policies.
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