UNITED NATIONS— The global economy is projected to grow by 4 per cent in 2022 – down from 5.5 per cent last year – and expand 3.5 per cent in 2023 amid new waves of COVID-19 infections, labour market challenges, supply-chain constraints and rising inflation, according to a UN report released on Thursday.
The World Economic Situation and Prospects 2022 report said 2021 growth momentum – following a contraction of 3.4 per cent in 2020 – began to slow by the end of the year, including in big economies like China, the European Union and the United States, as the effects of fiscal and monetary stimuli faded and major supply-chain disruptions surfaced.
Along with the ongoing pandemic, “rising inflationary pressures in major developed economies and a number of large developing countries present additional risks to recovery,” according to report by the U.N. Department of Economic and Social Affairs.
“Global headline inflation rose to an estimated 5.2 per cent in 2021, more than 2 percentage points above its trend rate in the past 10 years,” it said.
The report also warned that an emerging longer-term consequence of the coronavirus pandemic was higher levels of inequality within and between countries.
“For the vast majority of developing countries, a full recovery of GDP per capita will remain elusive. The gap between what they will achieve and what they would have achieved without the pandemic will persist well into 2023,” the report projected.
“In contrast, GDP per capita in the developed economies is expected to almost fully recover by 2023 relative to pre-pandemic projections,” it added.