Striking detail on Turkey in UN's 2024 global economic report

The United Nations (UN) has released its World Economic Situation and Prospects 2024 report.

The report emphasized that the world economy proved more resilient than expected in 2023, despite numerous shocks stemming from conflicts and climate change, amidst significant monetary tightening and ongoing policy uncertainties worldwide.

Pointing out that many major developed economies showed remarkable resilience despite sharp monetary tightening, supported by strong labor markets that bolstered consumer spending, the report stated that the gradual decline in inflation in most regions, driven by lower energy and food prices, allowed central banks to slow or pause interest rate hikes.

"POSES SERIOUS CHALLENGES"

However, it was emphasized that stronger-than-expected economic growth masked short-term risks and structural weaknesses in the world economy, and it was noted that the pessimistic short-term outlook caused by high interest rates, further escalation of conflicts, slowing international trade, and increasing climate disasters poses serious challenges to global growth.

Addressing the expectation of higher borrowing costs and tight credit conditions, the report stated that this presents headwinds for a world economy that is under a high level of debt burden but also needs investment to stimulate growth, combat climate change, and accelerate progress toward the Sustainable Development Goals (SDGs).

The report stated that when tight financial conditions are combined with the risk of increasing geopolitical fragmentation, it creates growing risks for global trade and industrial production.

In an environment of ongoing risks and uncertainties, the report noted that global economic growth, estimated at 2.7 percent in 2023, is projected to fall to 2.4 percent in 2024, and while growth is expected to show a moderate recovery to 2.7 percent in 2025, it will remain below the pre-pandemic growth trend of 3 percent.

RECESSION AVOIDED IN 2023

The report noted that the world economy avoided the worst-case scenario, such as a recession, in 2023, and a prolonged period of low growth appears on the horizon.

Recalling that the US economy performed better than expected last year, the report stated that the country's economic growth, estimated at 2.5 percent for 2023, is expected to slow to 1.4 percent in 2024. The US economy is projected to grow by 1.7 percent in 2025.

The report mentioned that Europe is still facing a challenging economic outlook due to high inflation and high interest rates, and while 0.5 percent growth was expected for the European Union in 2023, economic growth is estimated to be 1.2 percent this year and 1.6 percent in 2025.

Stating that economic growth in Japan is expected to slow from 1.7 percent in 2023 to 1.2 percent in 2024 despite supportive monetary and fiscal policy stances, the report provided growth forecasts for the United Kingdom of 0.5 percent for 2023, 0.4 percent for 2024, and 1 percent for 2025.

The report noted that China, facing headwinds both domestically and abroad, is expected to experience a moderate slowdown, with growth falling from 5.3 percent last year to 4.7 percent in 2024.

TURKEY DETAIL IN UN REPORT

Recalling that economic management in Turkey has aggressively tightened monetary policy to curb inflation, the report stated that the country's growth was estimated at 3.5 percent last year, with economic growth projections of 2.7 percent for this year and 3.1 percent for next year.

The report also pointed to the earthquakes that occurred in Turkey early last year, which caused tens of thousands of deaths and widespread damage, stating that the effects were determined to be largely limited to the earthquake zone, and from an economic perspective, reconstruction spending in these regions partially offset the disruption in economic activity.

Noting that inflation in Turkey is expected to ease in 2024, the report stated that price increases are projected to remain at double-digit levels until 2025.

News Source: AA