Global growth likely to be lower than earlier projected, says UNCTAD
The UN Conference on Trade and Development (UNCTAD) has issued a cautionary note regarding a potential further deceleration in global economic growth for 2024. In response, UNCTAD Secretary-General Rebeca Grynspan (pictured) has stressed the imperative of coordinated global policy action to safeguard economies, particularly those of developing nations, against the challenges posed by shifting trade dynamics, escalating debt burdens, and the mounting costs of climate change.
While the anticipated decrease in interest rates for 2024 may alleviate some budgetary strains, Grynspan underscores that monetary policy alone cannot effectively tackle significant global issues such as sovereign debt crises, widening disparities, and the climate crisis. This observation comes in the wake of UNCTAD’s 2024 report launch.
Job creation
Grynspan emphasises the necessity of a well-balanced approach, combining fiscal, monetary, demand-side, and investment-enhancing measures to ensure financial stability, foster job creation, and enhance income equality.
Given the increasingly interconnected global landscape, this report holds particular relevance for Kenya, providing valuable insights to help chart a course for the year ahead and plan accordingly.
Grynspan advocates for concerted international action to address disparities in global trade and concentrations of market power, as well as advocating for greater fiscal latitude for borrowing countries to advance Sustainable Development Goals.
The report also highlights the actions of central banks in advanced economies, which have aggressively raised interest rates since 2022 to counter inflation.
However, these measures, the report contends, have not fully accounted for the ramifications of Covid-19-related disruptions in supply chains and the resultant increase in market monopolies, which have contributed to rising prices and profits.
Despite stable employment in 2023, inflation decreased, suggesting supply issues contributed to earlier inflation.
The report says Global trade is under threat from rising protectionism, disrupted maritime routes due to geopolitical tensions, and climate change. In 2023, the global economy grew by 2.7 per cent, but international goods trade decreased by 1 per cent. Despite some recovery in 2024, merchandise trade is unlikely to drive growth this year.
