United Nations predicts slower global economic growth in 2022 and 2023

On Thursday, the United Nations predicted reduced global economic growth in 2022 and 2023, citing fresh COVID-19 breakouts, chronic labour market concerns, lingering supply chain issues, and rising inflationary pressures. 

Following a 5.5 percent increase in 2021, the highest pace of global economic growth in more than four decades, the global economy is expected to grow by only 4% in 2022 and 3.5 percent in 2023. 

Consumer spending, some increase in investments, and commerce in goods surpassed levels prior to the COVID-19 pandemic last year. However, by the end of 2021, the pace for growth had slowed significantly, particularly in large economies such as China, the European Union, and the United States, as the effects of the pandemic’s monetary and financial impulses began to fade and substantial supply chain disruptions arose. 

The highly transmissible omicron variant of COVID-19 has a large economic and human toll. The pandemic will continue to pose the biggest risk to an inclusive and sustainable global recovery unless a concerted and sustained global effort to contain COVID-19 is implemented, which includes universal access to vaccines. 

Supply chain issues and inflationary pressures are being exacerbated by labor shortages in industrialized nations. The majority of emerging countries and economies in transition have experienced slower growth. 

While higher commodity prices have benefited countries that rely on commodity exports, rising food and energy prices have sparked rapid inflation, particularly in the nine-member Commonwealth of the Independent States, which was formed after the Soviet Union disintegrated in 1991, as well as Latin America and the Caribbean. Tourism-dependent economies, particularly in small island developing states, have been particularly sluggish to recover. 

The UN forecast is close to the World Bank’s forecast, which was announced on Tuesday. The 189-nation global financial institution, which offers loans and grants to low and middle-income nations, has lowered its global economic growth prediction to 4.1 percent this year from 4.3 percent last June. 

It blamed persistent COVID-19 outbreaks, a decline in government economic support, and global supply chain delays. 

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