The UN lowers its forecast for global economic growth in 2022 to 3.1% | Economic news


By EDITH M. LEDERER, Associated Press

UNITED NATIONS (AP) — The United Nations on Wednesday dramatically lowered its forecast for global economic growth this year from 4% to 3.1%, saying the war in Ukraine has triggered a rise in global food and material prices. raw materials and exacerbated inflationary pressures, shattering the fragile recovery. of the COVID-19 pandemic.

The mid-2022 forecast from the United Nations Department of Economic and Social Affairs indicates that the downward revision to growth prospects is widespread, including the world’s largest economies – the United States, China and especially the European Union – and the majority of other developed and developing countries.

The World Economic Situation and Prospects report also warned that the current forecast of 3.1% “faces significant downside risks from a further escalation of the war in Ukraine and potential new surges. of the pandemic”.

“This downturn and the war in Ukraine – triggering sharp increases in food and fertilizer prices – will hit developing countries particularly hard, exacerbating food insecurity and increasing poverty,” the report said.

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According to UN forecasts, global inflation is expected to increase to 6.7% in 2022, double the average of 2.9% over the period 2010-2020, with sharp increases in food prices and Energy.

UN Secretary General Antonio Guterres said: “The war in Ukraine – in all its dimensions – is triggering a crisis that is also devastating global energy markets, disrupting financial systems and exacerbating the world’s extreme vulnerabilities. in development”.

He urged “swift and decisive action” to ensure a steady flow of food and energy supplies to open markets, saying this requires the lifting of export restrictions, the release of surpluses and reserves to countries in the need and the fight against rising food prices “to calm market volatility.”

The 26-page report says the war in Ukraine not only weighs heavily on its economy and that of Russia, but also affects the economies of its neighbors in Central Asia and Europe.

The economy of the European Union – which in 2020 imported 57.5% of its energy consumption and is most directly affected by disruptions in energy supplies from Russia – is only expected to grow by 2 .7% this year, down from the January forecast of 3.9%, according to the report.

The U.S. economy is expected to grow 2.6% in 2022 and 1.8% in 2023, a significant downward revision from the January forecast, the report said, pointing to stubbornly high inflation, aggressive monetary tightening of the share of the US Federal Reserve and the direct fallout from the war in Ukraine.

In China, the UN said, the economy is expected to grow 4.5% this year, up from 8.1% in 2021. It cited continued lockdowns in major cities to contain the Omicron wave of the COVID pandemic -19 in the first quarter of the year.

“The resulting slowdown in economic activities has contributed to prolonging supply chain disruptions, negatively affecting other developing countries through trade channels,” the report said.

As a group, the UN said the economies of developing countries are expected to grow by 4.1% this year, up from 6.7% in 2021.

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