However, the outlook is only cautiously optimistic. Higher-for-longer interest rates, debt sustainability challenges, continuing geopolitical tensions and ever-worsening climate risks continue to pose challenges to growth, threatening decades of development gains, especially for least developed countries (LDCs) and small island developing states (SIDS).

The report projects the world economy to grow by 2.7 per cent this year (plus 0.3 percentage point from the January forecast) and by 2.8 per cent in 2025 (plus 0.1 percentage point from the January forecast).

The upward revisions mainly reflect a better outlook in the United States, where the latest forecast points to 2.3 per cent growth in 2024, and several large emerging economies, notably Brazil, India and Russia.

The outlook for China registers a small uptick with growth now expected to be 4.8 per cent in 2024. 

On the other hand, the economic outlook for Africa has deteriorated since the last release, with expected growth lowered by 0.2 percentage points for 2024, threatening adverse impacts for many of the world’s poor.

Global growth, on an average, in the coming years is expected to remain below the average of 3.2 per cent during 2010–2019.

Economic prospects for SIDS are projected to improve, with GDP growth increasing from 2.4 per cent in 2023 to 3.3 per cent in 2024, primarily driven by a sustained rebound in tourism.

However, SIDS remain vulnerable to spikes in international commodity prices due to their high import dependency on essential goods. Frequent extreme weather events and high public debt also pose significant challenges.

Although softening international commodity prices and tight monetary stances adopted by most central banks have set the global economy on a disinflationary path, several developing economies continue to grapple with stubbornly high inflation.

Many developing economies also face challenges such as elevated borrowing costs, persistent exchange rate pressures, and lingering political instability.

The stagnant employment situation in developing economies contrasts with that of developed economies, particularly in North America, Europe and Japan, where unemployment rates remain near record lows.

Furthermore, the near-term outlook for certain economies is clouded by potential intensification of geopolitical tensions and multiple conflicts across the world, said the UN report.

The report discusses how the growing use of critical minerals for accelerating the energy transition can also be an opportunity for achieving the US Sustainable Development Goals in many developing countries.

Countries endowed with critical mineral resources will, however, need smart policies, as well as effective implementation capacities to reap the benefits and avoid a renewed ‘resource curse’, the report added.

Fibre2Fashion News Desk (DS)