The United Nations Conference on Trade and Development (UNCTAD) on Thursday (24.03.2022) lowered its global growth estimates due to the impacts of Russia's invasion of Ukraine and changes in macroeconomic policies that put developing countries at risk.
In the report, the United Nations agency changed the projection from 3,6% to 2,6% for global growth in 2022. For America, expectations were lowered by 0.6%, while for the North American region to growth of 2.4% and for In Latin America and the Caribbean, the adjustment was 0.3 percentage points to 2.3%.
“Global growth prospects for 2022 will be affected by downside risks to both supply and demand, exacerbated by the war in Ukraine,” he said. “On the supply side, persistent disruptions will continue to hamper economic activity.”
He also said that macroeconomic tightening would weaken demand, while rising prices would erode real incomes and reduce investor confidence. “These pressures will only deepen the geographic, financial and socioeconomic fractures that marked the recovery in 2021.”
UNCTAD said global growth this year would be slower, more uneven and more fragile than it had expected in September. “Our estimates incorporate the two main new features of the global economic situation: the war in Ukraine and the tightening of macroeconomic policy in developed economies.”
The economic impact of the war has led to significantly lower growth estimates as incomes are hit by soaring food and fuel prices, UNCTAD said.
He added that the World trade has been restricted by sanctions, while problems of confidence and financial instability have resurfaced.
“As a result of the conflict, oil and gas prices have risen from already high levels, wheat prices have reached levels not seen since the late 2000s, and a wide range of other items, including fertilizers, metals and manufacturing inputs, face severe supply shortages,” the UN agency said.
UNCTAD considered that Some countries could benefit from higher prices and demand for their commodity exports, while developing countries would face tougher economic challenges.
"Almost no country will be immune to the deterioration in global growth prospects, although some may benefit from higher prices and demand for their commodity exports."He said.
“On the other hand, developing economies that were in a precarious situation due to debt obligations, supply shocks and fluctuations in the terms of trade and exchange rate will see their economic performance deteriorate further,” he added.
The war between Russia and Ukraine has caused disruptions in global trade and is likely to have long-term effects on its structure.
“In the short term, price effects and shortages are spreading to economies that are more dependent on exports from Ukraine and Russia, especially of commodities ranging from oil to minerals and food,” UNCTAD explained in the “Trade and Development Report 2021″.-
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