Global economy growth pegged at 4% in 2022, 3.5% in 2023: UN report

The global economy is pegged to grow by 4 per cent in 2022 after expanding by 5.5 per cent in 2021, and grow 3.5 per cent in 2023 in wake of the new waves of COVID-19 infections, rising inflation, labour market challenges, and supply-chain constraints, as per a UN report published on Thursday. 

Titled 'United Nations World Economic Situation and Prospects (WESP) 2022', the report highlighted that the sturdy recovery in 2021, driven by robust consumer spending and some pick up in investment, along with trade in goods crossing pre-pandemic levels, marked the highest growth rate in over four decades. 

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It further highlighted that the growth momentum in 2021, following a contraction of 3.4 per cent in 2020, started to slow down by the end of the year, comprising in big economies such as the US, China, and the European Union, as the effects of fiscal and monetary stimuli dissipated and major supply-chain disruptions emerged. 

Besides the ongoing COVID-19 pandemic, "rising inflationary pressures in major developed economies and a number of large developing countries present additional risks to recovery," according to the report by the UN Department of Economic and Social Affairs. 

"Global headline inflation rose to an estimated 5.2 per cent in 2021, more than 2 percentage points above its trend rate in the past 10 years," the report said. It also warned that a rising longer-term consequence of the pandemic was higher levels of inequality within and between the economies. 

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"For the vast majority of developing countries, a full recovery of GDP per capita will remain elusive. The gap between what they will achieve and what they would have achieved without the pandemic will persist well into 2023," the report pegged. 

"In contrast, GDP per capita in the developed economies is expected to almost fully recover by 2023 relative to pre-pandemic projections," it noted.