UN Trade Arm Warns of Stalling and Divergent Global Growth in 2024
The United Nations (UN) has issued a forecast warning of “stalling and divergent” global growth for the year 2024. While global economic growth is projected to increase slightly from 2.4% in 2023 to 2.5% in 2024, there are significant concerns about the state of the global economy. The UN Trade and Development Report highlights several factors contributing to the precarious economic situation, including slowing growth in the U.S. and the risk of a recession in Europe. Let’s explore the key points from the article to gain insights into the UN’s forecast.
Concerns about the Global Economy:
According to Richard Kozul-Wright, Director of the Division on Globalization and Development Strategies at UNCTAD, the global economy is currently weak, and the UN’s growth projection is optimistic. While the UN hasn’t declared a recession in the U.S., economic headwinds are expected to lead to a slowdown in the U.S. economy next year. Factors such as the UAW strike, tightening credit, student loan repayments restarting, and the potential government shutdown pose significant challenges.
European Recession Risk:
The UN highlights the economic situation in Europe, stating that it is not receiving enough attention. The UN’s forecast for the global economy hinges on the eurozone, and a growth rebound is needed in Europe. Kozul-Wright notes that European investment is flat, and the eurozone is on the edge of a recession. The report emphasizes that stagnant or falling real wages and fiscal austerity are dragging down growth in Europe.
Impact on Developing Countries:
The UN report underscores that economic inequality remains a significant challenge, with stagnant wages and the effects of monetary tightening in advanced economies disproportionately affecting developing countries. Additionally, the widening wealth gap threatens developing countries’ economic recovery and their ability to achieve sustainable development goals. The report reveals that nearly one-third of frontier economies are on the verge of debt distress, amidst rising interest rates, weakening currencies, and sluggish export growth.
Call for Regulation in Food Trade:
The UN’s Trade and Development Report also addresses the need for more regulation and oversight in the food trade industry. With recent inflation in food prices and shocks in key commodity markets, the UNCTAD calls for a transparent and regulated food trade system. The report criticizes major food industry suppliers, such as Cargill, Bunge, Archer Daniels Midland, and Louis Dreyfus Companies, suggesting that their behavior resembles that of hedge funds and advocates treating them accordingly. The UNCTAD emphasizes the importance of implementing regulatory measures similar to the Dodd-Frank Act in the financial sector.
The UN Trade and Development Report warns of stalling and divergent global growth in 2024, with concerns about the global economy, including a potential slowdown in the U.S. economy and the risk of a European recession. Developing countries face challenges related to economic inequality, rising debt distress, and sluggish export growth. The report also highlights the need for increased regulation and oversight in the food trade industry. As global economic uncertainties persist, policymakers and stakeholders must address these issues to support sustainable and inclusive growth worldwide.
Source: https://www-cnbc-com.cdn.ampproject.org/c/s/www.cnbc.com/amp/2023/10/04/expect-stalling-and-divergent-global-growth-un-trade-arm-warns.html
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