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UN chops global economic growth forecast to 1.9% in 2023

The United Nations is the latest organization to cut its forecast for 2023 global economic growth.

The U.N. said Wednesday that growth will fall significantly to 1.9% this year.

The forecast is down from an estimated 3% in 2022, one of the lowest growth rates in recent decades. 

Contributing factors are the food and energy crisis sparked by the war in Ukraine, the impact of the COVID-19 pandemic, persistently high inflation and the climate emergency.

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The U.N. Department of Economic and Social Affairs said the current global economic slowdown “cuts across both developed and developing countries, with many facing risks of recession in 2023.”

“A broad-based and severe slowdown of the global economy looms large amid high inflation, aggressive monetary tightening, and heightened uncertainties,” U.N. Secretary-General Antonio Guterres said in a foreword to the 178-page report.

The U.N. does project a moderate pick-up to 2.7% in 2024 if inflation gradually abates and economic headwinds start to subside.

The World Bank cut its growth forecast nearly in half earlier this year from a previous projection of 3% to just 1.7%.

Ukranian servicemen

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The International Monetary Fund, which provides loans to needy countries, projected in October that global growth would slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. 

According to the U.N. report, this year “growth momentum has weakened in the United States, the European Union and other developed economies, adversely affecting the rest of the world economy.”

In the United States, GDP is projected to expand by only 0.4% in 2023 after estimated growth of 1.8% in 2022, the U.N. said. 

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Many European countries are projected to experience “a mild recession” with the war in Ukraine heading into its second year on Feb. 14, high energy costs, inflation, and tighter financial conditions depressing household consumption and investment.

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The economies in the 27-nation European Union are forecast to grow by just 0.2% in 2023, down from an estimated 3.3% in 2022, the U.N. said. 

United Nations headquarters

And in the United Kingdom, which left the EU three years ago, GDP is projected to contract by 0.8% in 2023, continuing a recession that began in the second half of 2022, it said.

The U.N. forecast that China’s economy, which expanded by only 3% in 2022, will accelerate to 4.8% this year.

The U.N. report said Japan’s economy is expected to be among the better-performing developed countries this year, with GDP forecast to increase by 1.5%, slightly lower than last year’s estimated growth of 1.6%.

The Associated Press contributed to this report.

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