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Africa is set to experience a slight growth boost, with projections indicating an increase in the growth rate from 3.3% in 2023 to 3.5% in 2024, according to the World Economic Situation and Prospects (WESP) report released by the United Nations (UN) in New York on Thursday. However, the global growth outlook appears less optimistic, with expectations of a slowdown from 2.7% in 2023 to 2.4% in 2024.
The report also sheds light on the growth trajectory for the Least Developed Countries (LDCs), forecasting a five per cent growth rate in 2024. Despite this positive projection, the growth falls short of the seven per cent target outlined in the Sustainable Development Goals (SDG).
The global labor market, post-pandemic, presents a mixed scenario. Developed countries, including the U.S. and the EU, experienced robust recovery with low unemployment rates. However, challenges such as real income losses and labor shortages persist. Developing countries, exemplified by China, Brazil, Türkiye, and Russia, report varying progress, with persisting gender gaps and high youth unemployment.
The report highlights a notable slowdown in investment growth across both developed and developing economies. While developed nations focus on sustainable and technology-driven sectors, developing countries grapple with challenges such as capital flight and reduced foreign direct investment. Global investment growth is expected to remain low due to economic uncertainties, high debt burdens, and rising interest rates.
International trade, once a significant growth driver, is losing momentum, with global trade growth weakening to 0.6% in 2023 and a modest recovery to 2.4% expected in 2024. Factors contributing to this include a shift in consumer spending from goods to services, geopolitical tensions, supply chain disruptions, and lingering pandemic effects.
Developing countries face hurdles such as high external debt levels and rising interest rates, making access to international capital markets challenging. Additionally, there is a decline in official development assistance and foreign direct investment for low-income countries, with debt sustainability emerging as a critical challenge.
The report also addresses the impact of climate change, citing extreme weather conditions in 2023, such as the hottest summer on record since 1880, leading to devastating wildfires, floods, and droughts globally. These events have direct economic repercussions, including damage to infrastructure, agriculture, and livelihoods. Studies predict substantial losses to the global economy due to climate change, with estimates suggesting a potential 10% reduction in global GDP by 2100 if global warming is not mitigated.
In conclusion, the report underscores the complex economic landscape shaped by various factors, urging concerted efforts for sustainable growth, debt management, and climate change mitigation.
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