The United Nations (UN) warned on Thursday, Jan. 13, that the economic recovery seen in 2021 would slow down in 2022 and in 2023.
According to the UN’s World Economic Situation and Prospects 2022, the global economy, which saw a 5.5 percent expansion in 2021, is projected to expand by only 4.0 percent in 2022 and by only 3.5 percent in 2023.
“In this fragile and uneven period of global recovery, the World Economic Situation and Prospects 2022 calls for better targeted and coordinated policy and financial measures at the national and international levels. The time is now to close the inequality gaps within and among countries. If we work in solidarity – as one human family – we can make 2022 a true year of recovery for people and economies alike.” said UN Secretary-General António Guterres.
As a result of the coronavirus disease (COVID-19) pandemic and the Omicron variant, the UN projects that global employment levels in 2022 and 2023 will remain lower than the pre-pandemic levels; regions such as Africa, Latin America and the Caribbean, and Western Asia are set to experience slow recovery in terms of employment.
Furthermore, the UN says that the amount of people living in extreme poverty is expected to remain higher than pre-pandemic levels in the next two years.
“Without a coordinated and sustained global approach to contain COVID-19 that includes universal access to vaccines, the pandemic will continue to pose the greatest risk to an inclusive and sustainable recovery of the world economy,” said Under-Secretary-General of the UN’s Department of Economic and Social Affairs Liu Zhenmin.
Economic inequality is also set to grow even wider as the UN projects that developing regions such as Africa, Latin America, and the Caribbean may be unable to see a full Gross Domestic Product (GDP) per capita recovery. Different sectors, particularly women, of these developing regions will see uneven recovery in terms of employment and income as a result of the widening inequality.
The UN said that developing regions hard-hit by the pandemic are close to experiencing a debt crisis due to financial vulnerabilities triggered by external debt burdens, increased borrowing, and even Asset Purchase Programs (APPs) which were essential in addressing supporting economic recovery.
“Monetary authorities in the developed countries will need to pace and sequence the tapering of asset purchases and reducing their balance sheets to maintain financial stability, keep the cost of servicing public debt low, ensure debt sustainability and avoid premature fiscal consolidation,” said UN Chief of the Global Economic Monitoring Branch Hamid Rashid.