Is the global economic situation deteriorating?
At a press conference in New York, Under-Secretary-General for Economic and Social Affairs Li Junhua said: “We are facing a fourth year of the pandemic, a nearly year-long war in Ukraine, and an intensifying climate emergency. These overlapping crises have already slowed growth, exacerbated poverty and hunger.” , threatening energy security, unleashing inflationary pressures, and leading to the debt crisis. Against this background, the near-term economic outlook appears cause for concern.”
The report expected that global output growth would slow from 3 percent in 2022 to 1.9 percent in 2023, which represents one of the lowest growth rates in recent decades. Growth is expected to rise moderately in 2024 to 2.7 percent, but this depends mainly on the pace and sequence of further monetary tightening, the course of the war in Ukraine and its consequences, and the possibility of further supply chain disruptions.
The report found that tepid global economic prospects also threaten the achievement of the 17 Sustainable Development Goals, while the 2023 SDG Summit in September will be considered the midpoint for implementation of the 2030 Agenda.
In a press statement, UN Secretary-General António Guterres said: “This is not the time for short-term thinking or for fiscal austerity that exacerbates inequality, increases suffering, and could put the Sustainable Development Goals out of reach. These unprecedented times call for unprecedented action.” "This includes a transformative stimulus package for the Sustainable Development Goals, developed through the collective and concerted efforts of all stakeholders."
Slow recovery
The current slowdown has slowed the pace of economic recovery from the Covid-19 crisis, threatening many developing and developed countries with the possibility of a recession during the current year.
Growth momentum in the United States, the European Union, and other advanced economies declined significantly in 2022, which had several implications for the rest of the global economy.
In addition, global financial conditions coupled with the appreciation of the dollar have exacerbated financial and debt vulnerabilities in developing countries.
Most developing countries also saw a slower job recovery in 2022 and continue to face significant employment stagnation, disproportionately affecting women.
Unattainable global goals
According to the report, slowing growth, coupled with rising inflation and growing debt vulnerabilities, threaten to further undo hard-won achievements in sustainable development, deepening the already negative effects of current crises.
He noted that the number of people facing acute food insecurity doubled in 2022 compared to the pre-pandemic period, reaching nearly 350 million people. He said that a prolonged period of economic weakness and slow income growth would not only hinder poverty eradication, but would also limit countries' ability to invest in the Sustainable Development Goals more broadly.
In this context, Mr. Lee told reporters that the situation is likely to improve slightly in 2024 in the absence of further shocks, “but that will not be enough to put us on the right track to build the economic base necessary to achieve the sustainable development goals.” He added: "We must work together to accelerate the necessary measures to create an enabling environment. In this regard, international cooperation is essential."
Slow growth in Arab countries
Despite strong economic outcomes in the West Asia region in the past two years, largely due to oil-producing countries, growth is expected to slow from 6.4 percent in 2022 to 3.5 percent in 2023 due to less favorable external factors.
While the Gulf countries and Iraq have witnessed rapid economic expansion due to rising oil prices and the significant increase in crude oil production, the looming economic slowdown may weaken demand for oil, which may negatively affect these economies.
On the other hand, non-oil-producing countries in the region suffered from the negative terms-of-trade impact resulting from the sharp rise in commodity prices, leading to huge losses in growth. These countries are expected to be exposed to significant financial pressures, which will impose a depletion of fiscal space and significantly undermine their sustainable growth.
Significant geopolitical risks remain given the ongoing conflicts in the State of Palestine, the Syrian Arab Republic and Yemen. While unemployment rates have fallen to historic lows in many countries in the region, including Saudi Arabia, high unemployment, particularly among youth, remains a major social and economic risk in the region.
