UNITED NATIONS, Jan 10 (IPS) – Over the past few years, the global economy has made significant progress in mitigating inflation, unemployment and poverty. Despite this, global growth has not yet recovered to pre-pandemic rates. This can be attributed to the numerous problems plaguing the world, including climate shocks, armed conflicts, and rising geopolitical tensions. These problems have a disproportionately negative impact on developing countries. To get back to achieving the Sustainable Development Goals (SDGs), it is essential to come up with solutions that promote economic growth for all.
“Several structural factors continue to hamper the economic prospects of developing countries, including high burdens, limited fiscal space, weak investment and low productivity growth. Climate change and geopolitical tensions pose additional risks,” said Li Junhua, Deputy Minister of Economic and Social Affairs (DESA).
On January 9, the United Nations (UN) released a report titled: World Economic Outlook 2025 It details the global economic situation and steps you can take to alleviate economic hardship. Despite widespread climate-related disasters and armed conflict, the global economy remained relatively ‘resilient’ through 2024, according to the report. Economic development is expected to increase by 2.9% in 2025, which is virtually unchanged from the 2024 growth rate. This is much lower than the average economic growth rate recorded before 2020.
Major economies around the world, including the United States, the European Union, and Japan, have experienced gradual economic recovery over the past year. Rather, developing countries continue to struggle with high youth unemployment, poverty and inflation, all of which are contributing to lower economic growth rates.
Demographic pressures and rising labor market demands have led to unemployment among young people in developing countries. According to the report’s figures, youth unemployment remains a serious problem in West Asia, North Africa, South Asia, Latin America and the Caribbean.
About 20% of young people in the region are unemployed. A significant portion of this population relies on informal employment, which often results in low wages and little or no benefits. Limited fiscal space in these national economies is leading to low job creation rates and difficulties for young people to enter the labor market.
Most young workers still lack social protection and remain in temporary jobs, making it difficult for them to grow into independent adults. Good jobs are the ticket to a better future for young people. And it is a passport for social justice, inclusion and peace. Now is the time to create opportunities for a brighter future,” said Sara Elder, Director of Employment Analysis and Public Policy at the International Labor Organization (ILO).
ILO Director-General Gilbert Houngbo said: “Millions of young people around the world are unable to get decent jobs, leaving them feeling insecure and unable to build a better life for themselves and their families.”
Although global inflation rates have been declining in recent years, developing economies still face high inflation. The global inflation rate is expected to be 6% in 2024 and 5.4% in 2025, according to Shantanu Mukherjee, Director of the Department of Economic Analysis and Policy at the UN Department of Economic and Social Affairs. This figure is 1.5 times higher than in 2025. south.
“This is a sign to most of us outside of this room just how serious the cost-of-living crisis is. Looking at the amount of public funds used to service debt in 2024, the median country allocated 11.1% of its income. This amount is more than four times that of a mid-level developing country. Even among developing countries, there are differences where the least developed countries tend to be systematically worse off in relative terms,” Mukherjee said.
Additionally, despite significant declines in poverty rates globally, extreme poverty rates persist in Africa. Climate shocks, armed conflict and the COVID-19 pandemic have all created widespread economic challenges across the world, with Africa being the most affected. According to figures in the report, the number of Africans living below the poverty line has been increasing in recent years.
Moreover, countries most affected by conflict in the world, such as the Gaza Strip, have experienced significant economic decline, with widespread poverty, unemployment, food insecurity, and limited access to basic services becoming increasingly common. Widespread war and damage to key infrastructure in Gaza have led to a decline in the region’s economy and wiped out some 69 years of economic development, according to the United Nations Development Program (UNDP).
Addressing the climate crisis is important to effectively promote global economic growth. According to the World Economic Forum (WEF), average global income is estimated to decline by 20% due to greenhouse gas emissions and extreme weather events. Additionally, according to the United Nations Environment Program (UNEP), if annual emissions remain the same, countries will need to spend at least $387 billion annually by 2030 to prevent climate-related damage.
Global cooperation is also essential to fostering global economic growth, especially in developing countries. To reduce carbon emissions and build a more sustainable future, we need to put in place technologies that promote the use of renewable energy sources. The UN DESA report states that the group of developed countries has made a new commitment to mobilize $300 billion in funding annually by 2035 to support the implementation of renewable energy infrastructure.
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