By Edith M. LEDERER
United Nations (AP) – The United Nations has planned slower global economic growth on Thursday this year and next year, highlighting the impact of overvoltage in American prices and the increase in trade tensions.
UN economists have also cited the volatile geopolitical landscape and threats of the increase in production costs, disturbances of the supply chain and financial turbulence.
“These days, there is so much uncertainty in the air,” said Shantanu Mukherjee, director of the Division of Economic Analysis and Policies of the United Nations Department of Economic and Social Affairs.
“It was a nervous period for the global economy,” he told journalists when the forecasts for the middle of the year. “In January of this year, we expected two years of stable growth – so inferior – and since then, the prospects have decreased, accompanied by significant volatility through different dimensions.”
The UN is now planning global economic growth of 2.4% this year and 2.5% next year – a drop of 0.4 percentage each year compared to its projections in January. Last year, the world economy increased by 2.9%.
Mukherjee said the slowdown affects most countries and regions, but among the most seriously affected, the poorest and less developed countries, whose growth prospects went from 4.6% to 4.1% since January.
“This results in a loss of billions of economic results for the most disadvantaged countries”, which houses more than half of the world’s population living in extreme poverty, he said.
Developed and developing countries of the world should also suffer, according to the United Nations report.
In the United States, economic growth is expected to drop, from 2.8% last year to 1.6% this year, he said, noting that higher prices and the uncertainty of policies should weigh on private investment and consumption.
China’s growth is expected to slow down to 4.6% this year, compared to 5% in 2024 due to the moderate feeling of consumers, disturbances in its manufacturing companies oriented towards export and continuous challenges in its real estate sector, according to the report.
The growth of the European Union should remain the same this year as last year – at only 1%, according to the report, citing shorter net exports and higher commercial barriers. The UK’s economic growth of 1.1% last year is expected to drop to 0.9%.
The weakening of trade, the slowdown in investments and the drop in prices of basic products should also erode growth in other major development economies, including Brazil, Mexico and South Africa.
India will remain one of the major fastest growth economies in the world, but the United Nations forecast said that its growth should drop from 7.1% in 2024 to 6.3% this year.
UN global economic growth forecasts are lower than that of the International Monetary Fund.
On a more positive note, Mukherjee said that the UN expected bilateral negotiations leading to a drop in prices, although he said they will not return to levels before the announcement of US President Donald Trump.
Nevertheless, Mukherjee said, the resolution of uncertainties would help individuals and businesses to move forward with economic decisions and this would have a positive impact on the global economy.
Originally published:
California Daily Newspapers
