UNITED NATIONS (AP) — The global economy recorded its lowest growth of the decade in 2019, falling to 2.3% as a result of protracted trade disputes and a slowdown in domestic investment, the United Nations said Thursday.
The U.N.'s annual report, the World Economic Situation and Prospects 2020, forecast a modest acceleration in global growth, reaching 2.5% in 2020 and 2.7% in 2021.
But the U.N. also cautioned that a flareup of trade tensions, financial turmoil or an escalation of geopolitical tensions could derail a recovery, slowing growth to just 1.8% this year.
The report warned that slower world growth “threatens to undermine progress towards eradicating poverty, raising living standards, and creating a sufficient number of decent jobs.”
The economic growth projections for the next two years are well below rises of 3.2% in 2017 and 3% in 2018. A year ago, the U.N. forecast that the global economy would grow about 3% in both 2019 and 2020.
The latest U.N. report said 2019 ended up having the slowest global economic expansion since the world financial crisis in 2008-2009, with growth trending down in virtually all major economies and slowing in all geographic areas except Africa.
“This slowdown is occurring alongside growing discontent with the social and environmental quality of economic growth, amid pervasive inequalities and the deepening climate crisis,” it said.
The U.N. said the broad-based slowdown “has been accompanied by a sharp slowdown in international trade flows and global manufacturing activity.”
“Amid rising tariffs and rapid shifts in trade policies, business confidence has deteriorated, dampening investment growth across most regions,” it said.
In addition, the report said, softening demand has also affected global commodity prices, particularly oil and industrial metals.
“A significant number of countries are still suffering from the effects of the 2014-2016 commodity price downturn, which has resulted in persistent output losses and setbacks in poverty reduction,” the U.N. said.
The 236-page report was produced by the U.N. Department of Economic and Social Affairs, the U.N. Conference on Trade and Development and the U.N.'s five regional economic commissions.
Secretary-General Antonio Guterres singled out the report’s warning “that economic risks remain strong, aggravated by deepening political polarization and increasing skepticism about the benefits of multilateralism.”
“These risks could inflict severe and long-lasting damage on development prospects,” the U.N. chief warned in the forward to the report. “They also threaten to encourage a further rise in inward-looking policies, at a point when global cooperation is paramount.”