Wahyu Dwi Anggoro
Growth in several large, developed economies, especially the United States, is projected to decelerate in 2024 given high interest rates, slowing consumer spending and weaker labour markets. The short-term growth prospects for many developing countries – particularly in East Asia, Western Asia and Latin America and the Caribbean – are also deteriorating because of tighter financial conditions, shrinking fiscal space and sluggish external demand.
Low-income and vulnerable economies are facing increasing balance-of-payments pressures and debt sustainability risks. Economic prospects for small island developing states, in particular, will be constrained by heavy debt burdens, high interest rates and increasing climate-related vulnerabilities, which threaten to undermine, and in some cases, even reverse gains made on the SDGs.
Global inflation is projected to decline further, from an estimated 5.7% in 2023 to 3.9% in 2024. Price pressures are, however, still elevated in many countries and any further escalation of geopolitical conflicts risks renewed increases in inflation.
In about a quarter of all developing countries, annual inflation is projected to exceed 10% in 2024, the report highlights. Since January 2021, consumer prices in developing economies have increased by a cumulative 21.1% significantly eroding the economic gains made following the COVID-19 recovery. Amid supply-side disruptions, conflicts and extreme weather events, local food price inflation remained high in many developing economies, disproportionately affecting the poorest households.
“Persistently high inflation has further set back progress in poverty eradication, with especially severe impacts in the least developed countries,” said Li Junhua, UN Under-Secretary-General for Economic and Social Affairs.
