Photo taken on Sept. 14, 2020 shows the outside view of the United Nations headquarters in New York, the United States. [Photo/Xinhua]
Global economic prospects have improved thanks to strong performances in the United States and large emerging economies, although vulnerabilities remain, says a UN report released on Thursday.
The world economy is now projected to grow 2.7 percent in 2024 and 2.8 percent in 2025, according to a mid-year update of the January 2024 World Economic Situation and Prospects report.
The January report predicted a 2.4 percent global growth rate for 2024 and 2.7 percent for 2025.
The upward revisions mainly reflect a better outlook in the United States and several large emerging economies, notably Brazil, India and Russia.
The outlook for China registers a small uptick with growth now expected to be 4.8 percent in 2024, compared with 4.7 percent in the January 2024 forecast.
The U.S. economy has remained remarkably upbeat in the face of sustained high interest rates, so far defying the expectations of a slowdown or a "soft landing," says the report. The latest forecast for the United States points to 2.3 percent growth in 2024, instead of 1.4 percent in the January prediction.
Outperforming other developed economies, the U.S. economy is projected to grow 1.7 percent in 2025 and inflation is projected to fall to 2.3 percent in 2025, with the unemployment rate remaining relatively unchanged, it says.
India's economy is now expected to grow 6.9 percent in 2024, 0.7 percentage points higher than the January forecast. Russia, despite the war in Ukraine, will see a growth rate of 2.7 percent, much higher than the January forecast of 1.3 percent. Brazil, another major emerging market, is expected to grow 2.1 percent, half a percentage point higher than the January prediction.
For other major economies of the world, the forecast for Japan's growth remains unchanged at 1.2 percent. Britain's economy, which remains in the low-growth territory, is now forecast to grow 0.8 percent instead of 0.4 percent.
Although the economic outlook for developed economies is revised up from 1.3 percent to 1.6 percent for 2024, the European Union's growth is revised down from 1.2 percent to 1.0 percent.
Africa and Western Asia are the other two regions that will see slower-than-expected growth.
The report revises down Africa's growth rate from 3.5 percent to 3.3 percent. In Western Asia, growth is now expected to be 2.7 percent instead of 2.9 percent.
Developing economies as a whole will grow 4.1 percent in 2024, instead of 4.0 percent. For the least developed countries, however, growth is now forecast at 4.8 percent, lower than the 5.0 percent predicted in January.
Global trade in goods and services is expected to grow 3.2 percent in 2024, up from 2.4 percent predicted in January.
The report cautions that the outlook is only cautiously optimistic. Higher-for-longer interest rates, debt sustainability challenges, continuing geopolitical tensions and ever-worsening climate risks continue to pose challenges to growth, threatening decades of development gains, especially for least developed countries and small island developing states.
On average, global growth in the coming years is expected to remain below the average of 3.2 percent during 2010-2019, says the report.
The mid-year update and the January report were prepared by the UN Department of Economic and Social Affairs.