U.N. report projects global economy growth to slow in 2022, 2023

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FILE PHOTO: Containers are seen at the Yangshan Deep-Water Port in Shanghai

UNITED NATIONS – The global economy is projected to grow by 4% in 2022 – down from 5.5% last year – and expand 3.5% in 2023 amid new waves of COVID-19 infections, labor market challenges, supply-chain constraints and rising inflation, according to a U.N. report released on Thursday.

The World Economic Situation and Prospects 2022 report said 2021 growth momentum – following a contraction of 3.4% in 2020 – began to slow by the end of the year, including in big economies like China, the European Union and the United States, as the effects of fiscal and monetary stimuli faded and major supply-chain disruptions surfaced.

Along with the ongoing pandemic, “rising inflationary pressures in major developed economies and a number of large developing countries present additional risks to recovery,” according to report by the U.N. Department of Economic and Social Affairs.

“Global headline inflation rose to an estimated 5.2 percent in 2021, more than 2 percentage points above its trend rate in the past 10 years,” it said.

The report also warned that an emerging longer-term consequence of the coronavirus pandemic was higher levels of inequality within and between countries.

“For the vast majority of developing countries, a full recovery of GDP per capita will remain elusive. The gap between what they will achieve and what they would have achieved without the pandemic will persist well into 2023,” the report projected.

“In contrast, GDP per capita in the developed economies is expected to almost fully recover by 2023 relative to pre-pandemic projections,” it added.

(Reporting by Michelle Nichols; editing by Jonathan Oatis)