This article was co-written by Marika Price Spitulski
Things are looking up for the global economy, according to new data from the United Nations. Last week, the organization released its mid-2024 World Economic Situation and Prospects report, which forecasted that the world economy will grow by 2.7% this year, surpassing the 2.3% prediction made in January.
The report also projected a 2.8% increase in 2025, indicating a slow yet steady progression toward a stronger financial future. Shantanu Mukherjee, director of the U.N.’s Economic Analysis and Policy Division, said at a news conference that “these changes are actually coming from better-than-expected performance in some of the large developed and emerging economies.”
According to the report, the jump is largely due to growth of the United States economy, thanks to dips in inflation without increases in unemployment. Additionally, improvements were found in several large emerging economies, particularly Brazil, India, and Russia.
The global economic growth rate hasn’t yet reached its pre-pandemic average, which was 3.2% between 2010-2019, and isn’t expected to within the next few years, but the uptick still offers something worth celebrating. Small Island Developing States, or SIDS, a collective of 39 states and 18 associate members that include Belize, Guyana, and the U.S. Virgin Islands, saw GDP growth rise from 2.4% in 2023 to 3.3% in 2024 thanks to a sustained rebound in tourism.
“The SIDS outlook for 2024 is promising, but we mustn’t get complacent,” United Nations Under-Secretary-General for Economic and Social Affairs Li Junhua said in a statement. “We need to think differently about our support to SIDS, mindful of their unique vulnerabilities. Through more effective partnerships and a more favorable international environment we can create the space that SIDS need to shore up their domestic capacities and build resilience for the future.”
That hopeful cautiousess extends to the increases as a whole. Mukherjee noted that the overall “prognosis is one of guarded optimism,” as high interest rates, debt sustainability challenges, climate risks, and continuing geopolitical tensions continue to pose challenges to growth.
Two other agencies also recently released similar reports, both of which found a higher increase in the global economic growth rate than the U.N. did, Inc. reported. The International Monetary Fund shared its annual World Economic Outlook in April, and forecasted that the global GDP will grow by 3.2% in 2024 and 2025. And earlier this month, the intergovernmental Organization for Economic Cooperation and Development projected global growth at 3.1% in 2024 and 3.2% in 2025.
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