UN / WORLD ECONOMIC SITUATION PROSPECTS

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25-Jan-2023 00:02:01
According to a new UN report, world output growth is projected to decelerate from an estimated 3 percent in 2022 to 1.9 percent in 2023, marking one of the lowest growth rates in recent decades. UNIFEED

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STORY: UN / WORLD ECONOMIC SITUATION PROSPECTS
TRT: 02:01
SOURCE: UNIFEED
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LANGUAGE: ENGLISH / NATS

DATELINE: 25 JANUARY 2023, NEW YORK CITY / FILE

SHOTLIST:

FILE – NEW YORK CITY

1. Wide shot, United Nations Headquarters

25 JANUARY 2023, NEW YORK CITY

2. Wide shot, press room
3. Wide shot, speakers taking seat, press room
4. SOUNDBITE (English) Li Junhua, Under-Secretary-General, Economic and Social Affairs, United Nations:
“The near-term economic outlook is a very sobering projected growth. Global growth in 2023 is the lowest we have seen in the last decade, down to just 1.9 percent.”
5. Med shot, reporters
6. SOUNDBITE (English) Li Junhua, Under-Secretary-General, Economic and Social Affairs, United Nations:

“Without further shocks in 2024, we're likely to improve a little bit, but it won't be sufficient or enough to put us on track to build the economic base needed to achieve the SDGs. we must work together to accelerate the actions needed to create the necessary enabling environment. In this regard, international cooperation is fundamental.”
7. Med shot, speakers, press room
8. SOUNDBITE (English) Shantanu Mukherjee, Director, Economic Analysis and Policy Division, United Nations Department of Economic and Social Affairs (UNDESA):
“As countries face pressures to shrink public spending in the short term, they do run the risk of kneecapping themselves by under-investing in human capital, green energy and digital transformation, or even climate resilience which undermines their own growth and debt sustainability prospects in the longer term.”
9. Med shot, speakers, press room
10. SOUNDBITE (English) Hamid Rashid, Chief, Global Economic Monitoring Branch, Economic Analysis and Policy Division, United Nations Department of Economic and Social Affairs (UNDESA):
“We call for more flexible inflation targeting and also probably raising the target inflation targets to some extent where it's applicable. Again, it's a very country-specific, we don’t have a prescription from all countries, but in general, that is the direction that may help to mitigate, to overcome the challenges. On the fiscal policy side, our one and only message for the global community at this stage is that to avoid fiscal austerity.”
11. Med shot, reporters, press room

STORYLINE:
According to a new UN report, world output growth is projected to decelerate from an estimated 3 percent in 2022 to 1.9 percent in 2023, marking one of the lowest growth rates in recent decades.

Launching the World Economic and Social Prospects (WESP) 2023, the Under-Secretary-General for Economic and Social Affairs, Li Junhua, said today (25 Jan) to reporters, “The near-term economic outlook is a very sobering projected growth.”

A series of severe and mutually reinforcing shocks — the COVID-19 pandemic, the war in Ukraine and resulting food and energy crises, surging inflation, debt tightening, as well as the climate emergency — battered the world economy in 2022.

Gloomy economic outlook threatening several countries — both developed and developing — with the prospects of a recession in 2023.

Junhua said, “Without further shocks in 2024, we're likely to improve a little bit, but it won't be sufficient or enough to put us on track to build the economic base needed to achieve the SDGs. We must work together to accelerate the actions needed to create the necessary enabling environment. In this regard, international cooperation is fundamental.”

Growth momentum significantly weakened in the United States, the European Union, and other developed economies in 2022, adversely impacting the rest of the global economy through several channels.

Tightening global financial conditions coupled with a strong dollar exacerbated fiscal and debt vulnerabilities in developing countries.

Over 85 percent of central banks worldwide tightened monetary policy and raised interest rates in quick succession since late 2021, to tame inflationary pressures and avoid a recession.

Global inflation which reached a multi-decade high of about 9 percent in 2022 is projected to ease but remain elevated at 6.5 percent in 2023.

Also talking to journalists today, Shantanu Mukherjee, Director of the Economic Analysis and Policy Division of the UN Department of Economic and Social Affairs (UNDESA), said, “As countries face pressures to shrink public spending in the short term, they do run the risk of kneecapping themselves by under-investing in human capital, green energy and digital transformation, or even climate resilience which undermines their own growth and debt sustainability prospects in the longer term.”

Most developing countries have seen a slower job recovery in 2022 and continue to face considerable employment slack.

Disproportionate losses in women’s employment during the initial phase of the pandemic have not been fully reversed, with improvements mainly arising from a recovery in informal jobs.

According to the report, slower growth, coupled with elevated inflation and mounting debt vulnerabilities, threatens to set back hard-won achievements in sustainable development further, deepening the already negative effects of the current crises.

Already in 2022, the number of people facing acute food insecurity had more than doubled compared to 2019, reaching almost 350 million.

A prolonged period of economic weakness and slow income growth would not only hamper poverty eradication but also constrain countries’ ability to invest in the SDGs more broadly.

Hamid Rashid, Chief of UNDESA’s Global Economic Monitoring Branch said, “We call for more flexible inflation targeting and also probably raising the target inflation targets to some extent where it's applicable. Again, it's a very country-specific, we don’t have a prescription from all countries, but in general, that is the direction that may help to mitigate, to overcome the challenges. On the fiscal policy side, our one and only message for the global community at this stage is that to avoid fiscal austerity.”

The report recommends reallocation and a reprioritization of public expenditures through direct policy interventions that will create jobs and reinvigorate growth.

This will require strengthening social protection systems, ensuring continued support through targeted and temporary subsidies, cash transfers, and discounts on utility bills, which can be complemented with reductions in consumption taxes or custom duties.

Strategic public investments in education, health, digital infrastructure, new technologies, and climate change mitigation and adaptation can offer large social returns, accelerate productivity growth, and strengthen resilience to economic, social, and environmental shocks.

Additional SDG financing needs in developing countries vary by source but are estimated to amount to a few trillion dollars per year.

Stronger international commitment is urgently needed to expand access to emergency financial assistance; to restructure and reduce debt burdens across developing countries; and scale up SDG financing.
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