The United Nations said, in a report on Wednesday, that pessimistic growth projections for 2023 should not lead to "short-term thinking or hasty fiscal austerity" that could exacerbate inequality and threaten development goals.

This comes at a time when the global economy faced a series of shocks last year, including the repercussions of the Corona epidemic "Covid-19", Russia's war on Ukraine, and high inflation.

Global economic growth is expected to decline from 3% in 2022 to 1.9% this year, which represents one of the lowest growth rates in recent decades, according to the United Nations in its report on the state and prospects of the global economy.

But UN Secretary-General Antonio Guterres said this is not the time for short-term thinking or hasty fiscal austerity that exacerbates inequality, increases suffering and can make the Sustainable Development Goals out of reach. "These unprecedented times demand unprecedented action," he added in a statement. ".

In 2015, the member states of the United Nations adopted the 17 Sustainable Development Goals, which include achieving food security, eradicating poverty, and providing access to clean and affordable energy by 2030.


A summit in New York later this year will assess progress towards these goals, but many of them seem a long way off.

Growth is expected to rise moderately in 2024 to 2.7%, but this depends mainly on the pace and sequence of further monetary tightening, the course and consequences of the war in Ukraine, and the possibility of further supply chain disruptions, according to the United Nations.

deepening negative effects

“Slowing growth, rising inflation and rising debt vulnerabilities threaten to further undo the hard-won achievements of the Sustainable Development Goals, deepening the already negative effects of the COVID-19 pandemic,” the UN report said.

The supervisor of the report, Hamid Rashid, said that in light of the current economic conditions, the "typical recipe" for economists is to cut spending.


"Our main message in the report is that governments in developing countries in particular ... should avoid austerity," he said, saying that this would be extremely harmful to development goals.

According to the report, debt service drained more than 25% of government revenues in 8 developing countries in 2022. In the case of Sri Lanka, debt service consumed about 80% of government revenues.

The United Nations has expressed concern about the risks of declining development aid, and Rashid said the war in Ukraine and future reconstruction "will divert some resources," warning of a major setback for low-income countries.

Last September, the United Nations Development Program estimated that an unprecedented set of crises had set human progress back 5 years.

According to the United Nations report, the number of people facing acute food insecurity doubled in 2022 compared to the pre-pandemic period, reaching nearly 350 million people.

The United Nations expected that non-oil-producing countries would be exposed to great financial pressures, which would exhaust fiscal space and greatly undermine sustainable growth.

She said that these countries suffered from the negative terms of trade impact resulting from the sharp rise in commodity prices, which led to huge losses in growth.

And while the Gulf countries and Iraq witnessed rapid economic expansion due to the rise in oil prices and the significant increase in its production - says the United Nations report - the looming economic slowdown may weaken the demand for oil, which may negatively affect these economies.