World Economic Situation and Prospects 2023

Why in News?

• The United Nations has recently released a new report World Economic Situation and Prospects 2023, which stated that the Global Gross Domestic Product (GDP) is likely to drop to 1.9 % in 2023 from 3 % in 2022.

Highlights

• The world’s average inflation rate was at 9% in 2022, which led to budgetary constraints in several developed as well as developing countries.
• Current downturn has slowed the pace of economic recovery from the Covid-19 crisis, threatening several countries with the prospects of recession in 2023.
• Most developing countries have seen a slower job recovery in 2022.
• Disproportionate losses in women’s employment during the initial phase of the pandemic have not been fully reversed.
• The world’s output growth can bounce back to 2.7 % in 2024, subject to a change in the war situation and the disruption of supply chains.
• China is projected to grow at 4.8 % in 2023 and 4.5 % in 2024.
• The US is estimated to register a 0.4 % economic growth this year and 1.7 % in 2024.
• Russian exports increased in 2022 as trade with China, India and Turkey surged.
• In South Asia, the economic outlook has significantly deteriorated due to high food and energy prices, monetary tightening and fiscal vulnerabilities.
• Average GDP growth is projected to moderate from 5.6 % in 2022 to 4.8 % in 2023.
• Challenging prospects for economies like Bangladesh, Pakistan and Sri Lanka, who have sought financial assistance from the International Monetary Fund (IMF) in 2022.
• Stronger international commitment is urgently needed to expand access to emergency financial assistance and scale up SDG financing for:
• Strengthening of social protection systems, ensuring continued support through targeted and temporary subsidies, cash transfers, and discounts on utility bills, which can be complemented with reductions in consumption taxes or custom duties.