UN raises world growth for this year by three tenths, to 2.7%

The UN This Thursday it raised its growth forecasts for the world economy in 2024 by three tenths, to 2.7% instead of the 2.4% advanced in January, according to the mid-year report on the world economic situation, presented in NY.

The prediction of growth by 2025 It has also improved slightly and now stands at 2.8%, says the document released by Shantanu Mukherjee, director of the Analysis and Policy Division at the Department of Economic and Social Affairs.

What leads the UN to raise its growth prospects?

The study paints a general picture “cautiously optimistic” in which certain vulnerable aspects persist, such as high interest ratesgeopolitical tensions and climate risks, in this order.

However, in the coming years – the report adds – the global growth It will be below the average in the 2010-19 period, which was 3.2%.

The projections have improved since January because the large economies have avoided recession by lowering inflation without increasing unemployment; among them, he cites the positive perspectives in USA (projected growth of 2.3%), China (4.8%) and those of other powers such as Brazil, India and Russia (2.7%).

If the outlook is solid for the US, thanks above all to a strong labor market and high household consumption, the outlook is more nuanced in the European space (including the United Kingdom), which, in general, will experience modest growth. this year, although the measures announced by the European Central Bank and the Bank of England They can be a good stimulus, he says.

The outlook is especially uncertain for the economies of developing countries, and particularly in Africawhere the growth projection drops two tenths since last January, which “threatens adverse effects for much of the world’s poor”.

Latin America, at a poor 1.7%

Without reaching the pessimism projected by the African continent, the report indicates that Latin America and the Caribbean can be defined as “low growth regions”, weighed down by structural problems such as high inflation, high interest rates, exchange rate pressures and a persistent political instability.

The growth in latin american regionIn fact, it will drop from 2.1% registered in 2023 to only 1.7% in the current year, before rebounding the following year, in which 2.4% is expected.

Inflation, although high in the region, will drop to 4.3% in 2024 (compared to 6.3 the previous year).

Growth is going to deflate in Brazil (largest economy in the area) up to 2.1% this year (2.9% last year), which is explained by the late impact of high interest rates and poor agricultural production.

The panorama outlined for Mexico, where it is expected that economic activity will lose steam due to a drop in domestic consumption and strict monetary conditions; while Argentina is expected to continue in recession (which has already happened 17 times in the past four decades).

Furthermore, unemployment continues to grow in Brazil and remains high in Chile, Colombia and Uruguay. High levels of debt affect the entire region in a generalized way.