UNITED NATIONS, May 17 — Global economic prospects have improved thanks to strong performances in the United States and large emerging economies, although vulnerabilities remain, showed a United Nations report released yesterday.
The world economy is projected to grow 2.7 per cent in 2024 and 2.8 per cent in 2025, according to a mid-year update of the January 2024 World Economic Situation and Prospects report.
The January report predicted a 2.4 per cent global growth rate for 2024 and 2.7 per cent for 2025.
The upward revisions mainly reflect a better outlook in the United States and several large emerging economies, notably, Brazil, India, and Russia.
The outlook for China registers a small uptick with growth now expected to be 4.8 per cent in 2024, compared with 4.7 per cent in the January 2024 forecast.
The United States economy has remained remarkably upbeat in the face of sustained high interest rates, so far defying the expectations of a slowdown or a “soft landing”, says the report. The latest forecast for the United States points to 2.3 per cent growth in 2024, instead of 1.4 per cent in the January prediction.
Outperforming other developed economies, the United States economy is projected to grow 1.7 per cent in 2025 and inflation is projected to fall to 2.3 per cent in 2025, with the unemployment rate remaining relatively unchanged, it says.
India’s economy is now expected to grow 6.9 per cent in 2024, 0.7 percentage points higher than the January forecast. Russia, despite the war in Ukraine, will see a growth rate of 2.7 per cent, much higher than the January forecast of 1.3 per cent. Brazil, another major emerging market, is expected to grow 2.1 per cent, half a percentage point higher than the January prediction.
The forecast for Japan’s growth remains unchanged at 1.2 per cent. Britain’s economy, which remains in the low-growth territory, is now forecast to grow 0.8 per cent instead of 0.4 per cent.
Although the economic outlook for developed economies is revised up from 1.3 per cent to 1.6 per cent for 2024, the European Union’s growth is revised down from 1.2 per cent to 1 per cent.
Africa and Western Asia are the other regions to see slower-than-expected growth.
The report revises Africa’s growth rate from 3.5 per cent to 3.3 per cent. In Western Asia, growth is now expected to be 2.7 per cent instead of 2.9 per cent.
Developing economies as a whole will grow 4.1 per cent in 2024, instead of 4 per cent. For the least developed countries, however, growth is now forecast at 4.8 per cent, lower than the 5 per cent predicted in January.
Global trade in goods and services is expected to grow 3.2 per cent in 2024, up from 2.4 per cent predicted in January.
The report cautions that the outlook is only cautiously optimistic. Higher-for-longer interest rates, debt sustainability challenges, continuing geopolitical tensions, and ever-worsening climate risks challenge growth, threatening decades of development gains, especially for least-developed countries and small island developing states.
On average, global growth in the coming years is expected to remain below the average of 3.2 per cent during 2010-2019, says the report.
The mid-year update and the January report were prepared by the United Nations Economic and Social Affairs Department.
— Bernama
