London (Business News Report) – The United Nations has lowered its forecast for the growth of the global economy during the current year 2022.
A UN report said that the global economy will grow by 4%, after it recorded 5.5% last year.
The UN also expected that the global economy will grow by 3.5% during the next year 2023.
The UN attributed lowering the forecast to new waves of coronavirus infections, labor market challenges, supply chain bottlenecks, and high inflation.
The World Economic Situation and Prospects Report 2022 said that the driving force for growth in 2021 began to slow down by the end of the year, including large economies such as China, the European Union and the United States, after a 3.4% contraction in 2020. The effects of fiscal and monetary stimulus programs fade and the consequences of turmoil emerge in major supply chains.
The report issued by the United Nations Department of Economic and Social Affairs stated that, in addition to the continuation of the pandemic, growing inflation pressures in major advanced economies and a number of major developing countries pose additional risks to recovery.
The declared global inflation rose to an estimated 5.2% in 2021, which is more than two percentage points above its trend rate in the past ten years, the report said.
The report also warned of the long-term consequences of the Coronavirus pandemic, which are represented in the high rates of inequality within and between countries.
For the vast majority of developing countries, getting the individual’s full share of GDP is far from being achieved (compared to before the pandemic), the report said. The gap between what they earn and what they would earn without the pandemic will continue until 2023 the report predicted.
In contrast, it is expected that the individual will obtain almost his full share of GDP in advanced economies by 2023, compared to pre-pandemic expectations, the report said.
“In this fragile and uneven period of global recovery, the World Economic Situation and Prospects 2022 calls for better targeted and coordinated policy and financial measures at the national and international levels,” said António Guterres, Secretary-General of the United Nations.
He added, “The time is now to close the inequality gaps within and among countries. If we work in solidarity – as one human family – we can make 2022 a true year of recovery for people and economies alike.”