UN downgrades world economic growth forecast
Geneva News (Reporter Yang Haiquan) On May 18, the United Nations Department of Economic and Social Affairs (Department of Economic and Social Affairs) released the "World Economic Situation and Prospects (updated in mid-2022)", saying that the conflict between Russia and Ukraine has affected the already existing situation under the epidemic. The fragile global economic recovery has triggered a severe humanitarian crisis in Europe, pushing up food and commodity prices and exacerbating global inflationary pressures.
The United Nations Department of Economic and Social Affairs lowered its forecast for global growth of 4.0% in 2022, released in January, to 3.1% amid rising inflationary pressures.
Global inflation is expected to rise to 6.7% in 2022, more than double the average inflation rate of 2.9% between 2010 and 2020, along with sharp increases in food and energy prices.
Global growth prospects have become weaker and more complex, especially in commodity-dependent developing economies, driven by rising energy and food prices and deteriorating global food security, particularly in Africa.
UN Secretary-General Antonio Guterres said the crisis sparked by the Russia-Ukraine conflict has disrupted global energy markets, disrupted the financial system and exacerbated extreme vulnerabilities in developing countries.
In this regard, all parties need to act quickly to lift export restrictions, distribute surplus and reserves to those who need it, and respond to rising food prices to ensure a stable flow of food and energy in open markets.
In addition to causing a humanitarian crisis, the Russian-Ukrainian conflict has also caused significant economic losses in Russia, Ukraine, Central Asia and neighboring economies, including the European Union, the report said.
The war has significantly weakened the EU's growth prospects, with GDP expected to grow by just 2.7% this year, instead of the 3.9% forecast in early January.
The sharp rise in energy prices has had a huge negative impact on EU trade.
In 2020, 57.5% of the EU's total energy consumption comes from imports, of which energy imported from Russia accounts for 25% of Europe's energy consumption. If Russia suddenly stops the supply of oil and natural gas, EU energy prices will rise rapidly, and inflationary pressure will further increase. exacerbated.
EU member states in Eastern Europe and the Baltic region have already experienced inflation well above the EU average and are therefore more severely affected.
High inflation is reducing real household incomes, especially in developing countries where poverty is more prevalent, wage growth has been constrained and fiscal support to cushion the impact of rising oil and food prices remains limited, the report said.
Soaring food and energy prices are having knock-on effects on other sectors of the economy and pose additional challenges to an inclusive recovery.
The knock-on effect is particularly severe for low-income households because they spend a much larger share of their income on food.
U.S. monetary tightening will push up borrowing costs for developing countries and widen financing gaps in many countries, including least developed countries, the report said.
Tighter external financial conditions will adversely affect growth prospects, especially for countries with high exposure to global capital markets and the risk of debt crises or defaults.
In this regard, Hamid Rashid, head of the global economic monitoring department of the United Nations Economic and Social Department, said that developing countries need to prepare for the impact of the Fed's aggressive monetary tightening policies and take appropriate macro-prudential measures to contain A sudden outflow of capital and a stimulus for productive investment.
The report also said that the outbreak of the Russian-Ukrainian conflict comes at a time when global carbon dioxide emissions are at record highs.
As the conflict pushes up energy prices, it will have a major impact on global efforts to tackle the climate emergency.
Fossil fuel production is likely to increase in the short term as oil and gas prices rise and countries expand energy supplies.
High prices for nickel and other metals could adversely affect the production of electric vehicles, while rising food prices could limit the use of biofuels.
In this regard, Shantanu Mukherjee, director of the Economic Policy and Analysis Division of the United Nations Department of Economic and Social Affairs, said that countries can solve the energy and food problems that have become more prominent due to the Russian-Ukrainian conflict by accelerating the adoption of renewable energy and improving energy efficiency. security issues and strengthen efforts to combat climate change.
Yang Haiquan