UN Raises Global Economic Growth Forecast to 2.7% This Year... "Variables Are Interest Rates and War"

Revised Upward from 2.4% Forecast in January
Improved Economic Outlook for US and Emerging Markets
Geopolitical Tensions, Prolonged High Interest Rates, and Climate Risks Remain Variables

The United Nations (UN) has revised upward its global economic growth forecast for this year. It expects the economies of emerging markets such as the United States, Brazil, India, and Russia to improve. However, geopolitical risks, prolonged high interest rates, and climate risks in impoverished countries remain variables.

On the 16th (local time), the UN released a World Economic Outlook report presenting this forecast, projecting an economic growth rate of 2.7% for this year. This figure is higher than the 2.4% forecast published in the report released in January. However, it is still below the pre-pandemic growth rate of 3% in 2020.

[Image source=Yonhap News]

According to the Associated Press, Shantanu Mukherjee, Director of the UN Department of Economic and Social Affairs, explained the reason for the upward revision in a press conference following the report's release, stating, "Our forecast is one of cautious optimism," and added, "It was important that wage increases and labor supply growth among workers, especially in advanced countries' labor markets, were confirmed."

However, Director Mukherjee drew a line against excessive optimism, saying, "Risks remain due to rising long-term interest rates, ongoing geopolitical tensions, and increasing debt burdens in impoverished countries." He continued, "About 430 million people in Africa live in extreme poverty, accounting for nearly 40% of the world's malnourished population, which is particularly concerning," and explained, "On average, debt situations in developing countries are not severe, but the continuous decline in investment growth is worrisome."

The UN Economic Outlook report forecasts that the economic growth rate of small developing countries will improve from 2.4% in 2023 to 3.3% in 2024 due to a rebound in tourism. However, it expects Africa's economic growth to fall to 3.3% in 2024, lower than the earlier forecast of 3.5%. Director Mukherjee assessed, "It is essential for developing countries to optimize the benefits of important mineral resources and design and implement economic, social, and environmental policies with clear objectives."

Meanwhile, the revised UN global economic growth rate announced on this day is somewhat lower than the forecasts of other major international organizations. Last month, the International Monetary Fund (IMF) projected the global economic growth rate for this year at 3.2%, 0.1 percentage points higher than its previous forecast in January. The Organisation for Economic Co-operation and Development (OECD) also released an economic outlook report on the 2nd, forecasting a 3.1% global economic growth rate for this year. This was also an upward revision from the 2.9% mid-year economic outlook announced in February.

This content was produced with the assistance of AI translation services.