UN economic forecast cites conflicts, sluggish trade, high interest and climate disasters

Jan 4, 2024, 3:13 PM | Updated: 9:26 pm

UNITED NATIONS (AP) — The United Nations issued a somber global economic forecast for 2024 on Thursday, pointing to challenges from escalating conflicts, sluggish global trade, persistently high interest rates and increasing climate disasters.

In its flagship economic report, the U.N. projected that global economic growth would slow to 2.4% this year from an estimated 2.7% in 2023, which exceeds expectations. But both are still below the 3% growth rate before the COVID-19 pandemic began in 2020, it said.

The U.N. forecast is lower than those of the International Monetary Fund in October and the Organization for Economic Cooperation and Development in late November.

The IMF said it expects global growth to slow from an expected 3% in 2023 to 2.9% in 2024. The Paris-based OECD, comprising 38 mainly developed countries, estimated that international growth would also slow from an expected 2.9% in 2023 to 2.7% in 2024.

The U.N.’s report — World Economic Situation and Prospects 2024 — warned that the prospects of prolonged tighter credit conditions and higher borrowing costs present “strong headwinds” for a world economy saddled with debt, especially in poorer developing countries, and needing investment to resuscitate growth.

Shantanu Mukherjee, director of the U.N.’s Economic Analysis and Policy Division, said fears of a recession in 2023 were averted mainly due to the United States, the world’s largest economy, curbing high inflation without putting the brakes on the economy.

But he told a news conference launching the report: “We’re still not out of the danger zone.”

Mukherjee said that’s because the unsettled situation in the world could fuel inflation. For example, another supply chain shock or problem in fuel availability or distribution could prompt another interest rate hike to bring the situation under control, he said.

“We’re not expecting a recession, per se, but because there is volatility in the environment around us, this is the major source of risk,” he said.

Very high interest rates for a long time and the threat of possible shocks to prices contribute to “quite a difficult balancing act,” Mukherjee said. “So that’s really why we said that we are not yet out of the woods.”

According to the report, global inflation, which was at 8.1% in 2022, is estimated to have declined to 5.7% in 2023, and is projected to decline further to 3.9% in 2023 .

But in about a quarter of all developing countries, annual inflation is projected to exceed 10% this year, it said.

While the U.S. economy performed “remarkably well” in 2023, the report said growth is expected to decline from an estimated 2.5% in 2023 to 1.4% this year.

“Amid falling household savings, high interest rates, and a gradually softening labor market, consumer spending is expected to weaken in 2024 and investment is projected to remain sluggish,” the U.N. said. “While the likelihood of a hard landing has declined considerably, the United States economy will face significant downside risks from deteriorating labor, housing and financial markets.”

With elevated inflation and high interest rates, the report said Europe faces “a challenging economic outlook.”

GDP in the European Union is forecast to expand from 0.5% in 2023 to 1.2% in 2024, it said, with the increase driven by “a pick-up in consumer spending as price pressures ease, real wages rise, and labor markets remain robust.”

Japan, the world’s fourth largest economy, is projected to see economic growth slow from 1.7% in 2023 to 1.2% this year despite the country’s monetary and fiscal policies, the report said, “Rising inflation may signal an end from the deflationary trend that persisted for more than two decades” in the country, it said.

In China, the world’s second-largest economy, the U.N. said recovery from COVID lockdowns has been more gradual than expected “amid domestic and international headwinds.

With economic growth of just 3.0% in 2022, the report said China turned a corner during the second half of 2023 with the growth rate reaching 5.3%. But it said the combination of a weak property sector and faltering external demand for its products “will nudge growth down moderately to 4.7% in 2024.

In developing regions, the U.N. said economic growth in Africa is projected to remain weak with a slight increase from an average of 3.3% in 2023 to 3.5% in 2024.

“The unfolding climate crisis and extreme weather events will undermine agricultural output and tourism, while geopolitical instability will continue to adversely impact several subregions … especially the Sahel and North Africa,” the report said.

The U.N. forecasts a moderate slowdown in East Asia economies from 4.9% in 2023 to 4.6% in 2024. In Western Asia, GDP is forecast to grow by 2.9% in 2024, up from 1.7% in 2023.

In South Asia, GDP rose by an estimated 5.3% last year and is projected to increase by 5.2% in 2024, “driven by a robust expansion in India, which remains the fastest growing large economy in the world.” Its growth is forecast to reach 6.2% this year, similar to its projected 6.3% increase in 2023.

United States News

Associated Press

After rare flash flood emergency, Florida prepares for more heavy rainfall in coming days

A tropical disturbance has brought a rare flash flood emergency to much of southern Florida as residents prepared to weather more heavy rainfall on Thursday and Friday. Wednesday’s downpours and subsequent flooding blocked roads, floated vehicles and delayed the Florida Panthers on their way to Stanley Cup games in Canada against the Edmonton Oilers. The […]

3 hours ago

Forgiving father's killer hard for 3 children of Jordan Rasmussen...

KSL Podcasts/Amy Donaldson

A family decides to forgive a killer, but will the next generation follow?

Michael Moore killed Jordan Rasmussen and Buddy Booth in 1982. Forgiving their father's killer was hard for Rasmussen's three children.

6 hours ago

Associated Press

Neil Goldschmidt, former Oregon governor who confessed to sex with a minor in the 1970s, has died

Neil Goldschmidt, a former Oregon governor whose confession that he had sex with a 14-year-old girl in the 1970s blackened what had been a nearly sterling reputation, has died. He was 83. Goldschmidt died at his Portland home on Wednesday, The Oregonian reported, according to family members. The newspaper said the reported cause was heart […]

8 hours ago

Associated Press

Man charged with robbing a California bank was released from prison a day earlier, prosecutors say

SANTA ANA, Calif. (AP) — A man charged with taking three people hostage while robbing a Southern California bank last month had been released from prison a day earlier, federal prosecutors said Wednesday. The 53-year-old was indicted on robbery charges after investigators said he claimed to have a gun, jumped over the teller counter and […]

8 hours ago

Associated Press

Woman with gun taken into custody after standoff at FBI building in Seattle, authorities say

SEATTLE (AP) — A woman armed with a handgun was taken into custody after an hourlong standoff at the FBI building in Seattle on Wednesday, authorities said. The woman walked into a publicly accessible area where people have to wait to be buzzed into the lobby, according to FBI spokesperson Steve Bernd. She pointed the […]

8 hours ago

Associated Press

South Carolina man pleads guilty in federal court to fatally shooting Virginia police officer

ABINGDON, Va. (AP) — A South Carolina man pleaded guilty to federal charges Wednesday in the shooting death of a police officer in southwest Virginia in 2021. Michael Donivan White, 36, of Cross, South Carolina, had already pleaded guilty to first-degree murder charges in state court. The federal counts include drug charges and causing the […]

8 hours ago

Sponsored Articles


Sanderson Ford

3 new rides for 3 new road trips in Arizona

It's time for the Sanderson Ford Memorial Day sale with the Mighty Fine 69 Anniversary, as Sanderson Ford turned 69 years old in May.



Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.


Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

UN economic forecast cites conflicts, sluggish trade, high interest and climate disasters