Global growth to slow to 1.9% in 2023, warn UN economists; Pakistan's prospects 'challenging'.

Senior UN economists warned Wednesday that intersecting crises are likely to add further damage to the global economy, with growth set to slow from three per cent in 2022 to 1.9 per cent this year, and that prospects for Pakistan, Bangladesh and Sri Lanka were "more challenging" that other South Asian countries.

This will be one of the lowest growth rates in recent decades, apart from during the 2007-8 financial crisis and the height of the COVID-19 pandemic, according to the UN World Economic Situation and Prospects Report, released on Wednesday.

'In most countries we expect that private consumption and investment will weaken due to incomes and higher income rates', said Ingo Pitterle, Senior Economist at the UN Department of Economic and Social Affairs (DESA). 'Several countries will see a mild recession before growth is forecast to pick up in the second half of this year and into 2024'.

The findings come amid the backdrop of the pandemic, the war in Ukraine and resulting food and energy crises, surging inflation, debt tightening, as well as the climate emergency.

In the near term, the economic outlook is gloomy and uncertain with global growth forecast to moderately pick up to 2.7 per cent in 2024.

However, this is highly dependent on the pace and sequence of further monetary tightening - rising interest rates - the consequences of the war in Ukraine, and the possibility of further supply-chain disruptions.

In South Asia, the report said that the economic outlook has significantly deteriorated due to high food and energy prices, monetary tightening and fiscal vulnerabilities, with average GDP growth is projected to moderate from 5.6 per cent in 2022 to 4.8 per cent in 2023.

"Growth in India is expected to remain strong at 5.8 per cent, albeit slightly lower than the estimated 6.4 per cent in 2022, as higher interest rates and a global slowdown weigh on investment and exports, the report said, adding that "The prospects are more challenging for other economies in the region. Bangladesh, Pakistan and Sri Lanka sought financial assistance from the International Monetary Fund (IMF) in 2022."

The report warns that the findings also threaten the achievement of the 17 Sustainable Development Goals (SDGs).

'This is not the time for short-term thinking or knee-jerk fiscal austerity that exacerbates inequality, increases suffering and could put the SDGs farther out of reach. These unprecedented times demand unprecedented action,' UN...