UN forecast on universal growth

Written by The Frontier Post

The UN has released the World Economic Situation and Prospects (WESP) report on Wednesday which revealed that the global economy is expected to grow by only 3.1 per cent this year, down from the 4.0 per cent projected in January, largely derailed by the war in Ukraine. The bi-annual forecast briefly revealed how the conflict has upended the fragile economic recovery from the COVID-19 pandemic, sparked a humanitarian crisis in Europe, surged food and commodity prices, and exacerbated inflationary pressures on the economies around the globe. The UN Secretary General, Antonio Guterres has said that the war in Ukraine in all its dimensions is setting in motion a crisis that is gradually devastating global energy markets, disrupting financial systems and exacerbating extreme vulnerabilities for the developing world. Guterres called for a quick and decisive action to ensure a steady flow of food and energy in open markets, by lifting export restrictions, allocating surpluses and reserves to those who need them, and addressing food price increases to calm market volatility. According to the WESP report, the downgrade in growth prospects includes the world’s largest economies including the United States, China, and the European Union as well as the majority of other developed and developing nations.

The global economy has witnessed incredible circumstances during the past two years, initially due to the emergence of COVID-19 pandemic and implementation of pandemic related restrictions which led to a complete halt to the businesses, social and educational activities across the world followed by the eruption of Russia-Ukraine war that gave another blow to the recovery of the universal economy in the recent months. Based on these facts, the experts were of the view that the continuous and worsening spillovers of war in Ukraine are likely to bring periodic or permanent supply shocks in the global supply chain in the coming months that will not only hamper the businesses and development activities in most parts of the world but also affect the growth rate in the world. The recent WESP report of the United Nations had confirmed the anxieties of the economists while stating that the war in Ukraine has exerted heavy toll on the economies of both combatant nations, Russia and Ukraine as well as neighbouring economies in Central Asia, Europe and the EU, while high energy and food prices coupled with worsening food insecurity had disturbed the developing economies in Africa, the Middle East, South Asia and the far East. Whereas, energy dependent EU and developing economies in Latin America are also facing serious difficulties in coping with current challenges of rising inflation, energy shortage and deteriorating food security. The analysts suggest that the trajectory of the events in Ukraine is likely to push the potential growth rate of 3.1 percent to 2.7 % by the end of this year.

In fact, the economy had always been influenced by the political events across the world, while leaders always preferred to protect their ego instead of reducing hunger and miseries of the masses throughout history. Hence, the politically motivated decisions and security driven postulations had always dented the economic landscapes of the world. Therefore, the power grabbers and warmongers are requested to contest their rivalry in other venues and let the masses around the globe feed their families in peace.

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