The UN has released an updated report on the world economy, which shows improved prospects compared to its January forecast. The report highlights better outlooks in major emerging economies such as Brazil, India, and Russia. The projected growth for the world economy in 2024 is now at 2.7 per cent, up from the 2.4 per cent forecasted earlier and is expected to reach 2.8 per cent in 2025.
Despite the good news, Shantanu Mukherjee, director of the UN’s Economic Analysis and Policy Division, expressed cautious optimism during a news conference to launch the report. He warned about challenges such as higher interest rates for longer periods, difficulties in debt repayment, ongoing geopolitical tensions, and climate risks that pose significant concerns for the world’s poorest countries and small island nations.
One of Mukherjee’s main concerns was inflation persistence as a symptom of global economic fragility. While inflation is lower than its peak in 2023, he highlighted recent increases in energy and food prices globally and the challenge of inflation exceeding the 2% target set by central banks in many developed countries. On a negative note, Africa’s lower economic growth rate was projected at 3.3%, down from an initial forecast of 3.5% at the beginning of 2024 due to weak prospects in major African economies like Egypt, Nigeria, South Africa and alarming number of African countries under debt distress or high risk of debt distress.
Mukherjee emphasized that Africa’s low growth rate poses a significant challenge because it is home to a large population living in extreme poverty and accounts for a significant share of the global undernourished population. Additionally two-thirds of high inflation rates listed in the report are African countries highlighting how continent faces challenges achieving economic stability and growth.
Overall while there are signs of improvement with better outlooks for some economies but there are still several challenges that need to be addressed before we can see sustained economic growth across all regions
