GENEVA
\nThe United Nations downgraded its forecast for global economic growth for 2022 to 2.5 percent from 3.5 percent as the Russia-Ukraine war worsens growth prospects.
\nRussia will fall into a deep recession this year, while significant slowdowns in growth are expected in parts of Western Europe and central, south and South-East Asia, the UN Conference on Trade and Development (Unctad) said in a report on Thursday.
\nLong-standing structural problems, new geopolitical risks and tighter monetary policies are set to stymie growth across developing economies, it said. This will not only hurt their fragile recovery but also undermine their long-term development, it added.
\n\u201cThe economic effects of the Ukraine war will compound the ongoing economic slowdown globally and weaken the recovery from the Covid-19 pandemic,\u201d Rebeca Grynspan, Unctad secretary-general, said.
\n\u201cMany developing countries have struggled to gain economic traction coming out of the Covid-19 recession and are now facing strong headwinds from the war. Whether this leads to unrest or not, a profound social anxiety is already spreading.\u201d
\nThe Russian military offensive in Ukraine entering its second month has led to higher oil prices, which has added to inflationary pressures on the global economy and raised the price of food and commodities. The International Monetary Fund and other organisations have said the conflict will dent global growth this year, increase poverty and disrupt supply chains.
\nSoaring food and fuel prices will have an immediate effect on the most vulnerable in developing countries, resulting in hunger and hardship for households who spend the highest share of their income on food, the Unctad said.
\n\u201cThe danger for many of the developing countries that are heavily reliant on food and fuel imports is more profound as higher prices threaten livelihoods, discourage investment and raise the specter of widening trade deficits,\u201d the report said.
\nThe war in Ukraine has also caused immediate disruptions to global trade and is likely to have longer-term effects on its structure, the Unctad said. In the short-term, higher prices and supply scarcity are spilling over onto economies more dependent on Ukrainian and Russian exports, especially of commodities, ranging from oil to minerals and food.
\nThe UN body raised concerns about uncertainties stemming from the conflict in key international markets: an environment of volatile capital flows, exchange rate instability and rising borrowing costs, particularly for least developed and middle-income developing countries, with the risk of serious external debt payment difficulties.
\nTo protect the global economy, the Unctad made several policy recommendations, including greater and less conditional financial support for developing countries, to help them deal with financial and economic shocks and increase investment to stimulate economic growth.
\nThere is also a need for immediate debt relief for Ukraine along with renewed discussions on ways to restructure the developing country\u2019s sovereign debt during periods of severe financial stress. It also called for sector-specific policies, including price controls and subsidies, to tackle pressures on inflation.
\nThe global economy is, literally and metaphorically, staring down the barrel of a gun. Stopping the war in Ukraine, rebuilding its economy and delivering a lasting peace settlement must be the priorities, the report said. But the international community will also need to deal with the widespread economic damage that the conflict is already causing in many parts of the developing world; damage that will only intensify as the conflict persists, said the report.<\/p>\n","protected":false},"excerpt":{"rendered":"
GENEVA The United Nations downgraded its forecast for global economic growth for 2022 to 2.5 percent from 3.5 percent as the Russia-Ukraine war worsens growth prospects. Russia will fall into a deep recession this year, while significant slowdowns in growth are expected in parts of Western Europe and central, south and South-East Asia, the UN […]<\/p>\n","protected":false},"author":2,"featured_media":251202,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[1269,5310,5311],"class_list":{"0":"post-251183","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","8":"tag-economic-growth","9":"tag-forecast","10":"tag-unctad"},"yoast_head":"\n