Protracted period of low growth looms large, undermining progress on sustainable development
The world economy continues to face multiple crises, jeopardizing progress towards the Sustainable Development Goals (SDGs). Although global economic growth outperformed expectations in 2023 with several large economies showing remarkable resilience, simmering geo-political tensions and the growing intensity and frequency of extreme weather events have increased underlying risks and vulnerabilities. Furthermore, tight financial conditions also pose increasing risks to global trade and industrial production.
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The revival and changing nature of industrial policy
Industrial policies are gaining increasing relevance, becoming centrepieces of many government policy agendas. These policies aim at changing the structure or sectoral composition of the economy in line with strategic and medium-term goals, such as export diversification, technology upgrading and industrialisation. As such, industrial policies include a broad range of issues, including ?infant industry? support, science, technology and innovation (STI) policies, trade and foreign direct investments policies and intellectual property rights, public procurement policies, and policies shaping the allocation of financial resources (Chang,…
World Economic Situation and Prospects: November 2023 Briefing, No. 177
Labour markets in developed economies ? signs of stabilization?
During the first three quarters of 2023, the state of labour markets in the developed economies continued to return to their pre-pandemic conditions, at least in terms of key headline indicators. The post-pandemic rebound in employment in these economies were quite swift, compared with the protracted labour market recovery that followed the global financial crisis of 2008?2009. Since early 2021, many developed economies, with the exception of the United Kingdom, saw a continuing decline in unemployment rates (figure?1), while the employment rates that reflect economic activity of the population reached historically high levels…
World Economic Situation and Prospects: October 2023 Briefing, No. 176
The need for energy transition
Energy transition is at the core of fighting against climate change and achieving net-zero by 2050. It refers to the global energy sector?s shift from a fossil-fuels based energy system to one that is based on renewable sources such as solar and wind. It is a systemic change that involves a structural transformation in the production and consumption of energy. Therefore, it requires significant amounts of investment in energy transition technologies which includes power generation, storage and distribution, energy efficiency, electrified transport and district heat, hydrogen, and carbon capture and storage (CCS) (IRENA, 2023a). A truly net-zero economy also…
World Economic Situation and Prospects: September 2023 Briefing, No. 175
Recent trends in domestic food prices
Food prices surged over the past few years owing to multiple shocks. Between 2019 and 2021, extreme weather events and supply chain disruptions derived from the pandemic drove up domestic food price inflation (measured as a component of the Consumer Price Index) in many countries. In 2022 domestic food inflation became more common across the world, reaching multi-decade highs in several countries amid the spillover effects of the war in Ukraine, higher international commodity prices and a surging US dollar. Headline inflation also rose significantly in most economies, in part due to the importance of food and energy in the consumption basket. While…
World Economic Situation and Prospects: August 2023 Briefing, No. 174
Supply chains for microchips
Increasing use of microchips in daily life
Microchips, sometimes also referred to as semiconductors, are central to modern electronics. They are virtually ubi?quitous in people?s daily lives, being present in smartphones and other consumer products, industrial machines and military systems (figure 1). Leibovici and Dunn (2021), based on industrial information in the United States, estimate that about 25 per cent of 226 manufacturing industries use semiconductors as a direct input; these industries represent 39 per cent of all manufacturing output. These rates are expected to increase quickly over time. More importantly, microchips are essential for countries to…
World Economic Situation and Prospects: July 2023 Briefing, No. 173
Prospects for a robust global recovery remain dim
Global growth remains subdued
The world economy is facing severe headwinds amid weak growth prospects, elevated inflation and heightened uncertainties. A confluence of factors, including legacy effects of the COVID-19 pandemic, the protracted war in Ukraine, the ever-worsening impacts of climate change, and rapidly shifting macroeconomic conditions, are weighing on the global outlook. Stubbornly high inflation in both developed and developing countries has prompted the most aggressive interest rate hike cycle in decades, causing financial conditions to tighten and exacerbating debt vulnerabilities. While economic prospects remain subdued,…
Prospects for a robust global recovery remain dim
Global growth remains subdued
The world economy is facing severe headwinds amid weak growth prospects, elevated inflation and heightened uncertainties. A confluence of factors, including legacy effects of the COVID-19 pandemic, the protracted war in Ukraine, the ever-worsening impacts of climate change, and rapidly shifting macroeconomic conditions, are weighing on the global outlook. Stubbornly high inflation in both developed and developing countries has prompted the most aggressive interest rate hike cycle in decades, causing financial conditions to tighten and exacerbating debt vulnerabilities.
While economic prospects remain subdued,…
World Economic Situation and Prospects: June 2023 Briefing, No. 172
Amid multiple global crises, risk of prolonged period of low growth looms large
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Press Release: English
Prospects for a robust global economic recovery remain dim amid stubborn inflation, rising interest rates and heightened uncertainties. Instead, the world economy faces the risk of a prolonged period of low growth as the lingering effects of the COVID-19 pandemic, the ever-worsening impact of climate change and macroeconomic structural challenges remain unaddressed, according to the World Economic Situation and Prospects as of mid-2023 released today. According to the report, the world economy is now projected to grow by 2.3 per cent in…
World Economic Situation and Prospects as of mid-2023
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