Global economic growth will slow to 1.9% in 2023: UN

For the world's least developed countries, the U.N. said growth is projected at 4.4% this year, about the same as last year but significantly below the UN's target of 7% by 2030.

The United Nations forecast Wednesday that global economic growth will fall significantly to 1.9% this year as a result of the food and energy crisis sparked by the war in Ukraine, the ongoing impact of the COVID-19 pandemic, persistently high inflation and the climate emergency.

Painting a gloomy and uncertain economic outlook, the U.N. Department of Economic and Social Affairs said the current global economic slowdown “cuts across both developed and developing countries, with many facing risks of recession in 2023.”

“A broad-based and severe slowdown of the global economy looms large amid high inflation, aggressive monetary tightening, and heightened uncertainties,” U.N. Secretary-General Antonio Guterres said in a foreword to the 178-page report.

The report said this year’s 1.9% economic growth forecast _ down from an estimated 3% in 2022 _ is one of the lowest growth rates in recent decades. But it projects a moderate pick-up to 2.7% in 2024 if inflation gradually abates and economic headwinds start to subside.

In its annual report earlier this month, the World Bank which lends money to poorer countries for development projects, cut its growth forecast nearly in half, from previous projection of 3% to just 1.7%.

The International Monetary Fund, which provides loans to needy countries, projected in October that global growth would slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. IMF Managing Director Kristalina Georgieva said at last week’s World Economic Forum in Davos that 2023 will be a difficult year, but stuck by the projection and said “we don’t expect a global recession.”

According to the U.N. report, this year “growth momentum has weakened in the United States, the European Union and other developed economies, adversely affecting the rest of the world economy.”

In the United States, GDP is projected to expand by only 0.4% in 2023 after estimated growth of 1.8% in 2022, the U.N. said. And many European countries are projected to experience “a mild recession” with the war in Ukraine heading into its second year on Feb. 14, high energy costs, and inflation and tighter financial conditions depressing household consumption and investment.