UN cuts global economic growth forecast to 3.1% in 2022

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The United Nations is cutting its global economic growth forecast for this year significantly from 4% to 3.1%.

The World Economic Situation and Prospects report also warned that the current forecast of 3.1% faces “significant downside risks from further intensification of the war in Ukraine and potential new waves of the pandemic”.

“This slowdown and war in Ukraine, which has triggered sharp increases in food and fertilizer prices, will hit developing countries particularly hard, increasing food insecurity and poverty,” the report said.

According to the UN forecast, with sharp increases in food and energy prices, global inflation is expected to reach 6.7% in 2022, doubling the average of 2.9% in the 2010-2020 period.

“The war in Ukraine, in all its dimensions, is driving a crisis that is devastating global energy markets, distorting financial systems and exacerbating extreme vulnerabilities for the developing world,” said UN Secretary-General Antonio Guterres.

He called for “rapid and decisive action” to ensure a steady flow of food and energy supplies to open markets, saying that this requires removing export restrictions, leaving surpluses and reserves to countries in need, and addressing rising food prices “to calm down”. market volatility.”

In the 26-page report, it was stated that the war in Ukraine not only brought heavy tolls on its own economy and Russia, but also affected the economies of its neighbors in Central Asia and Europe.

The economy of the European Union, which imports 57.5% of its energy consumption in 2020 and is most affected by the cuts in energy supply, is expected to grow by only 2.7% this year compared to the forecast in January. 3.9% according to the report.

Pointing to persistently high inflation, aggressive monetary tightening of the US Federal Reserve and direct spillover, the report said that the US economy is expected to grow by 2.6% in 2022 and 1.8% in 2023, a significant downward revision from the January forecast. The war in Ukraine.

The UN said the economy in China is expected to grow by 4.5% this year, up from 8.1% in 2021. It demonstrated the permanent curfew in major cities in the first quarter of the year to contain the Omicron wave of the COVID-19 pandemic. year.

“The resulting slowdown in economic activity contributed to the prolongation of supply chain disruptions and negatively impacted other developing countries through trade channels,” the report said. “In addition, rising commodity prices contributed to higher production costs across the region and negatively impacted exports.”

As a group, the UN said emerging market economies are projected to grow by 4.1% this year, up from 6.7% in 2021.