Global Economy Likely To Drop To 1.9% In 2023: UN

The United Nations (UN) predicted that global economic growth is likely to drop to 1.9 per cent in 2023 due to the Russia-Ukraine war which has led to the food and energy crisis, in addition to the ongoing impact of the Covid-19 pandemic, perpetual high inflation and the climate emergency.

The present global economic slowdown is cutting across both the developed and developing nations with the consequent chances of recession in the current year, as per the UN World Economic Situation and Prospects 2023 report

Citing the report, UN Secretary-General Antonio Guterres said that a wide and drastic global slowdown of economy certains the high inflation, aggressive monetary tightening and heightened uncertainties. 

The report predicted that in 2023, the global economic growth will drop to 1.9 per cent which is lower from a calculated 3 per cent in last year. This is expected to be one of the lowest growth rates in recent decades. 

However, in 2024, the report forecast that it will moderate pick-up to 2.7 per cent if inflation gradually lessens.

The World Bank has also predicted the global economic growth to 1.7 per cent in its annual report released earlier this month from 3 per cent. 

The International Monetary Fund (IMF) forecasted that global economic growth rate will slow down to 3.2 per cent in 2022 from 6 per cent in 2021. It will be 2.7 per cent in 2023. 

Kristalina Georgieva, Managing Director, IMF said at the World Economic Forum in Davos that this year will be difficult but we are not expecting a worldwide recession. 

The growth momentum has weakened in the United States, the European Union and other developed economies which is adversely affecting the global economy this year, the report read. 

Despite this, India is expected to remain strong at 5.8 per cent in 2023 due to the international slowdown weighing on investments and exports and higher interest rates, the report said.