Monetary and fiscal policies taken by advanced economies risk triggering a global recession and prolonged stagnation, the United Nations Conference on Trade and Development (UNCTAD) warned in its “Trade and Development Report 2022” on Monday. .
These policies might inflict worse damage than the financial crisis of 2008 and the COVID-19 shock in 2020, UNCTAD pointed out, explaining that rapidly rising interest rates and fiscal tightening in advanced economies, combined with multiple crises resulting from the pandemic and the conflict in Ukraine, had already turned weak global growth into a marked slowdown.
The report notes that middle-income countries in Latin America, as well as low-income countries in Africa, will experience some of the sharpest downturns this year. Overall, Africa’s economic activity is expected to grow moderately by 2.7% in 2022 and 2.4% in 2023, following a rebound of 5.1% in 2021.
UNCTAD forecasts that the world economy will grow by 2.5% in 2022 and growth is expected to decelerate further to 2.2% in 2023.
