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Global economy to grow 2.7% in 2024 as major economies avoid severe downturn: UN report

Global economy to grow 2.7% in 2024 as major economies avoid severe downturn: UN report
New Delhi [India], May 17 (ANI): The growth rate of the world economy is expected to remain around 2.7 per cent in 2024, and 2.8 per cent in 2025, according to the World Economic Situation and Prospects report released by the Department of Economic and Social Affairs of United Nations. The report added that global economic prospects have improved since January, with major economies avoiding a severe downturn, bringing down inflation without increasing unemployment.

The current projections are up by 0.3 percentage points from the January forecast for the year 2024 and 0.1 percentage points for the next year, 2025.

However, the UN report kept the world growth outlook in the cautiously optimistic category. The world body added that higher-for-longer interest rates, debt sustainability challenges, continuing geopolitical tensions and ever-worsening climate risks continue to pose challenges to growth, threatening decades of development gains, especially for least developed countries and small island developing States.

The upward revisions mainly reflect a better outlook in the United States, where the latest forecast points to 2.3 per cent growth in 2024, and several large emerging economies, notably Brazil, India and the Russian Federation. The outlook for China registers a small uptick, with growth now expected to be 4.8 per cent in 2024, the report observed.

On the other hand, it highlighted that the economic outlook for Africa has deteriorated since the last release, with expected growth lowered by 0.2 percentage points for 2024, threatening adverse impacts for many of the world's poor. On average, global growth in the coming years is expected to remain below the average of 3.2 per cent during 2010-2019.

Going ahead, the report added that the softening international commodity prices and tight monetary stances adopted by most central banks have set the global economy on a disinflationary path, several developing economies continue to grapple with stubbornly high inflation. Many developing economies also face challenges such as elevated borrowing costs, persistent exchange rate pressures, and lingering political instability.

The stagnant employment situation in developing economies contrasts with that of developed economies, particularly in North America, Europe and Japan, where unemployment rates remain near record lows. Furthermore, the near-term outlook for certain economies is clouded by the potential intensification of geopolitical tensions and multiple conflicts across the world.

In the wake of the growing use of minerals in electric vehicles and semiconductor components, the report highlighted that the energy transition can also be an opportunity for achieving the Sustainable Development Goals in many developing countries.

"Countries endowed with critical mineral resources will, however, need smart policies, as well as effective implementation capacities to reap the benefits and avoid a renewed 'resource curse'," the report underscored.