ECA Warns of Global Economic Slowdown in WESP 2024 Report
By Faridat Salifu
The recently released World Economic Situation and Prospects (WESP) 2024 report by the Economic Commission for Africa (ECA) delivers a cautionary message, projecting a deceleration in global Gross Domestic Product (GDP) growth.
The report anticipates a decline from 2.7% in 2023 to 2.4% in the upcoming year, with a modest recovery to 2.7% in 2025.
Adam Elhiraika, Director of the Macroeconomics and Governance Division of ECA, expressed concern about tight financial conditions, escalating risks to global trade and industrial production, and ongoing geopolitical fragmentation in a statement released on Friday, January 26, 2024.
Developing countries, particularly those vulnerable and low-income, are expected to grapple with challenging growth prospects, complicating their recovery from pandemic-induced losses.
The report emphasizes the adverse impacts of the unfolding climate crisis, extreme weather events, and geopolitical instability on various regions, with a particular focus on Africa, including the Sahel and North Africa.
Additionally, the report notes that while global inflation eased in 2023 after peaking for two years, it remained above the 2010-2019 average. This reduction in global inflation, however, may exacerbate food insecurity and poverty, particularly in developing countries.
Furthermore, the report highlights a slowdown in global investment trends and weakened international trade growth. It underscores the delicate balancing act faced by central banks worldwide as they navigate efforts to manage inflation, revive growth, and ensure financial stability.
The report advocates for strengthened multilateralism to expedite progress towards the Sustainable Development Goals (SDGs) by 2030. It underscores the importance of global cooperation in the face of disruptive shocks such as the climate crisis and escalating conflicts.
Despite the challenges outlined, the report also points to revived industrial and innovation policies aimed at fostering structural changes and supporting a green transition.
This includes market fixes and strategic approaches to innovation policies as part of the proposed solutions to address the current economic landscape.