UN warns of stalling global economy

Overall, it expects world economic growth is projected to slow from three percent in 2022 to 2.4% this year – and there’s few signs of a rebound next year. As such, UNCTAD has called for a change in policy direction, including by leading central banks, and accompanying institutional reforms promised during the Covid-19 crisis to avert a lost decade. 

The organisation’s Secretary-General Rebeca Grynspan said: “To safeguard the world economy from future systemic crises, we must avoid the policy mistakes of the past and embrace a positive reform agenda. 

“We need a balanced policy mix of fiscal, monetary and supply-side measures to achieve financial sustainability, boost productive investment and create better jobs. Regulation needs to address the deepening asymmetries of the international trading and financial system.” 

The comments follow the UNCTAD’s publication of its Trade and Development Report 2023, which has found that, while some economies – including Brazil, China, India, Japan, Mexico, Russia and the US – have demonstrated resilience in 2023, others face more formidable challenges.  

Europe, for example, is on the edge of recession – with it grappling with a rapid tightening of monetary policy and strong economic headwinds, with major economies slowing down and Germany already contracting.

Debt burdens also remain a major concern – with rising interest rates, weakening currencies and sluggish export growth combining to squeeze the fiscal space for essential needs.