Global economy to slow this year, risking a ‘lost decade’ for developing nations

The global economy will slow down in 2023 amid heightened financial turmoil, risking another “lost decade” for developing countries facing unprecedented levels of debt distress and interest rates hikes that will cost them $800 billion in foregone income, a UN agency has said.

Global economic growth will drop to 2.1 per cent this year, compared to an earlier projection of 2.2 per cent, from 3.1 per cent in 2022, assuming the financial fallout from higher interest rates is contained to the bank runs and bailouts of the first quarter, the UN Trade and Development Conference (Unctad) said in its latest Trade and Development Report Update on Wednesday.

Annual growth across large swathes of the world economy will fall below their pre-pandemic levels and well below the decade of strong expansion before the global financial crisis of 2008, it said. This will have a potentially devastating effect on developing…

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