U.N revises down economic growth to 2.5% in 2022
The United Nations (U.N) has projected the global economy to grow between 2.5% and 2.8% in 2022.
This is a substantial decline from its earlier forecast of 3.1 percent in May this year when two months after Russia had invaded Ukraine.
According to UN, the slump in growth in inked on three factors among them the pre-existing supply chain disruptions worsened by the ongoing conflict in Ukraine which have greatly impacted global food and fuel supplies,
The persistent inflationary pressures which have seen several central banks raise their interest rates with the aim of anchoring inflation will also see a sluggish growth.
It will also be slowed by the rising borrowing costs and worsening liquidity which has continued to worsen conditions in emerging economies at a time when more funding is needed.
As a result of the ongoing disruptions in supply chain, as well as the imminent debt crisis, emerging economies are anticipated to record subdued growth in the fourth quarter.
Global commodity prices registered mixed performance in the third quarter of 2022 with the energy prices increasing the most by 78.9% year on year, mainly due the persistent supply chain bottlenecks coupled with increasing demand for gas.
High energy costs and food prices have since seen inflation rate across the glob rise to record level, with Kenya’s hitting an all-time record of 9.2 – the levels last seen in 2012.
The trend has left the Central banks across the globe save for Japan and China with no choice but to raise interest rates to slam breaks on inflation.