UN cautiously optimistic on global economy, but downside risks remain

By Gokhan Ergocun

ISTANBUL (AA) - The global economy is improving but persistent challenges remain, including high interest rates, debt sustainability issues, geopolitical tensions and ever-worsening climate risks, according to a recent report by the UN.

The report, titled World Economic Situation and Prospects as of mid-2024, indicates that major economies have managed to avoid a severe downturn and have successfully curbed inflation without increasing unemployment.

Global economic growth is projected to reach 2.7% in 2024, up by 0.3 percentage point from previous estimates in January, with a further increase to 2.8% in 2025, improving 0.1 percentage point.

The improved outlook is attributed to a better outlook in the US and several large emerging economies including Brazil, India and Russia.

Despite a global disinflationary trend, many developing economies still face high inflation, elevated borrowing costs and currency pressures.

Additionally, stagnant employment situations and lingering political instability in developing economies pose further challenges.