UNITED NATIONS (AP) — The United Nations forecast lower global economic growth for 2022 and 2023 on Thursday, saying the world is facing new waves of COVID-19 infections, persistent labor market challenges, lingering supply chain issues and rising inflationary pressures.
The U.N. said that after expanding by 5.5% in 2021 — the highest rate of global economic growth in more than four decades — the world economy is projected to grow by only 4% in 2022 and 3.5% in 2023.
Last year’s robust recovery was largely driven by consumer spending, some increase in investments and trade in goods surpassing levels before the COVID-19 pandemic, according to the U.N. World Economic Situation and Prospects 2022 report launched Thursday.
But the momentum for growth “slowed considerably by the end of 2021, including in big economies, like China, the European Union and the United States” as the impacts of monetary and financial stimuli from the pandemic began to recede and major supply chain disruptions emerged, the report said..
U.N. Undersecretary-General for Economic and Social Affairs Liu Zhenmin pointed to the economic and human toll of the highly transmissible omicron variant of COVID-19.
“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 global economy,” Liu said.
The report said labor shortages in developed economies are adding to supply chain challenges and inflationary pressures.
It said growth in most developing countries and economies in transition has generally been weaker.
While higher commodity prices have helped countries reliant on commodity exports, rising food and energy prices have triggered rapid inflation, particularly in the nine-member Commonwealth of Independent States, formed after the break-up of the Soviet Union in 1991, and in Latin America and the Caribbean, the U.N. said.
“Recovery has been especially slow in tourism-dependent economies, notably in the small island developing states,” it said.
The United Nations forecast is similar to the World Bank’s. released on Tuesday.
The 189-nation global financial institution that provides loans and grants to low and middle-income countries downgraded its forecast of worldwide economic growth to 4.1% this year from the 4.3% growth it was forecasting last June. It blamed continuing outbreaks of COVID-19, a reduction in government economic support and ongoing bottlenecks in global supply chains.