UN Report Cautiously Optimistic About Global Economic Outlook – OpEd
By Rodney Reynolds
A United Nations report expects a sustained rebound in tourism to improve the economic prospects for small island developing States (SIDS), leading to GDP growth from 2.4 per cent in 2023 to 3.3 per cent in 2024. 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.
“The SIDS outlook for 2024 is promising, but we mustn’t get complacent,” said Li Junhua, United Nations Under-Secretary-General for Economic and Social Affairs and Secretary-General of the Fourth International Conference on Small Island Developing States, to be held in Antigua and Barbuda on 27–30 May 2024.
“We need to think differently about our support to SIDS, mindful of their unique vulnerabilities. Through more effective partnerships and a more favourable international environment, we can create the space that SIDS need to shore up their domestic capacities and build resilience for the future,” he added.
Developing economies face persistent challenges
The World Economic Situation and Prospects as of mid-2024 released today further points out that several developing economies continue to grapple with stubbornly high inflation—although softening international commodity prices and tight monetary stances adopted by most central banks have set the global economy on a disinflationary path.
The sluggish 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. Besides, the near-term outlook for certain economies is clouded by a potential intensification of geopolitical tensions and multiple global conflicts.
According to the report, the world economy is projected to grow by 2.7 per cent in 2024 (+0.3 percentage points from the January forecast) and 2.8 per cent in 2025 (+0.1 percentage points 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 the Russian Federation. The outlook for China registers a small uptick with growth expected to be 4.8 per cent in 2024.
Harnessing the potential of critical minerals
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. On average, global growth in the coming years is expected to remain below the average of 3.2 per cent during 2010–2019.
The UN report discusses how the growing use of critical minerals for accelerating the energy transition can also be an opportunity for achieving the Sustainable Development Goals in many developing countries. However, countries endowed with critical mineral resources will need smart policies and effective implementation capacities to reap the benefits and avoid a renewed ‘resource curse’, the report underscores.
Moreover, international cooperation will remain crucial to facilitate technology transfers and financing to developing countries, combat illicit financial flows and ensure the supply of the critical minerals needed for the green transition. Many of these issues will be covered by the recently announced Secretary-General’s Panel on Critical Energy Transition Minerals, which will develop a set of common and voluntary principles to build trust and transparency while accelerating the race to renewables