The United Nations Office at Geneva
Multimedia Newsroom
STORYLINE
UN agency warns of policy-induced global recession worse than 2007 financial crisis
The UN Conference on Trade and Development (UNCTAD) on Monday urged advanced economies to change course in their monetary and fiscal policies to avert a global recession worse than the global financial crisis of 2007 to 2009.
Excessive monetary tightening and inadequate financial support threatens to leave developing countries exposed to cascading crises of debt, health, and climate, UNCTAD warned in its annual report on trade and development.
“We are in a world of cascading and interconnected crises: climate change, COVID-19 and the war in Ukraine,” said Rebeca Grynspan, UNCTAD Secretary-General at a press conference in Geneva. “As the Secretary-General of the UN said, we are in a perfect storm. It is a difficult moment, no doubt, for all of us, but also for policymakers, because choices matter.”
Relying on higher interest rates to bring down prices without generating a recession is an imprudent gamble, the UNCTAD report warned. Central banks’ decisions to increase rates impact emerging economies with high levels of private and public debt, it also noted. Fiscal tightening in developed economies, combined with the COVID-19 pandemic and the war in Ukraine have already turned a global slowdown into a downturn.
“The synchronized slowdown is hitting all regions but is ringing alarm bells for developing countries. Our calculations show that the average growth rate in developing countries will drop below three per cent, as it did in the last decade of the 1980s,” she said.
Alarming levels of debt distress and under-investment
In addition, “some 90 developing countries have seen their currencies weaken against the dollar this year. And over a third of them have seen that by more than a ten per cent devaluation.”
UNCTAD expects the world economy to grow 2.5 per cent in 2022, and to decelerate further to 2.2 per cent in 2023. That will leave real GDP still below its pre-pandemic trend and generate a cumulative shortfall of more than $17 trillion, close to 20 per cent of the world’s income. This is insufficient for sustainable development, UNCTAD insisted, further squeezing public and private finances and damaging employment prospects.
Sustainable recommendations
UNCTAD urged a course correction in favour of policy measures that directly target price spikes in energy, food, and other vital sectors.
“We need to prioritize progress on a multilateral legal framework for handling debt restructuring, including all official and private creditors. And we also recommend a program of reforms in developing economies to boost productive investment and constrain capital moving to exploit tax loopholes,” added Ms. Grynspan.
Echoing that message, Richard Kozul-Wright, head of the team in charge of the report insisted that the global economy “is not yet in a recession. It's heading towards one and there are downside risks that could push it into one, depending on how policymakers, particularly in the advanced economies, respond to the current situation. So, I think it’s really (worth) watching what policymakers are going to do over the course of the next four to six months.”
UNCTAD provides economic and trade analysis, facilitates consensus-building and offers technical assistance to help developing countries use trade, investment, finance and technology for inclusive and sustainable development.
ends
TRT: 2’36”
SOURCE: UNTV CH
LANGUAGE: ENGLISH / NATS
ASPECT RATIO: 16:9
DATELINE: 03 Oct. 2022
HYBRID PRESS BRIEFING
GENEVA, SWITZERLAND
SHOTLIST
- Medium shot, UN Geneva flag alley.
- Wide shot, press room with panel of speakers.
- SOUNDBITE (ENGLISH) UNCTAD Secretary-General, Rebeca Grynspan: “We are in a world of cascading and interconnected crises: climate change, COVID-19 and the war in Ukraine. As the Secretary-General of the UN has said, we are in a perfect storm. It is a difficult moment, no doubt, for all of us, but also for policymakers, because choices matter.”
- Medium shot, cameras, and journalist.
- SOUNDBITE (ENGLISH) UNCTAD Secretary-General, Rebeca Grynspan: “The synchronized slowdown is hitting all regions but is ringing alarm bells for developing countries. Our calculations show that the average growth rate in developing countries will drop below three per cent, as it did in the last decade of the 1980s.”
- Close up shot, camera screen showing speakers.
- SOUNDBITE (ENGLISH) UNCTAD Secretary-General, Rebeca Grynspan: “Some 90 developing countries have seen their currencies weaken against the dollar this year; 90 developing countries. And over a third of them have seen that by more than a ten per cent devaluation.”
- Medium shot, journalists taking notes.
- SOUNDBITE (ENGLISH) UNCTAD Secretary-General, Rebeca Grynspan: “We need to prioritize progress on a multilateral legal framework for handling debt restructuring, including all official and private creditors, and we also recommend a program of reforms in developing economies to boost productive investment and constrain capital moving to exploit tax loopholes.”
- Medium shot, journalists taking notes.
- SOUNDBITE (ENGLISH) Director, Division on Globalization and Development Strategies, UNCTAD, Richard Kozul-Wright: “The global economy is not yet in a recession. It's heading towards one and there are downside risks that could push it into one, depending on how policymakers, particularly in the advanced economies, respond to the current situation. So, I think it’s really (worth) watching what policymakers are going to do over the course of the next four to six months.”
- Medium shot, speaker speaking.
- Medium shot, staff monitoring.
- Close-up shot, hands of journalist typing.
Similar Stories
1
1
1
Edited News | WFP
Gaza: One million receive food parcels as humanitarians race to ‘push back hunger’
Food is slowly returning to the shelves in Gaza amid “apocalyptic scenes” but supplies are still desperately inadequate, UN humanitarians said on Tuesday, as they issued fresh calls for wider access and continued financial support.
1
1
1
Press Conferences | WMO , ITU , WFP , WHO , UNHCR , IFRC
Alessandra Vellucci, Director of the United Nations Information Service (UNIS) in Geneva, chaired the hybrid briefing, which was attended by spokespersons and representatives from the International Telecommunication Union, the World Food Programme, the World Health Organization, the International Federation of Red Cross and Red Crescent Societies, the United Nations High Commissioner for Refugees, and the United Nations Children's Fund.
1
1
1
Edited News | OHCHR , UNOG
UN Human Rights Office spokesperson Seif Magango today told the bi-weekly UN press briefing in Geneva of more details that are emerging on the atrocities committed in El Fasher, in Sudan during and after its takeover by the Rapid Support Forces.
1
1
1
Edited News | OHCHR , UNOG
UN Human Rights Office spokesperson Seif Magango made the following comment on Friday at the bi-weekly press briefing in Geneva.
1
1
1
Edited News | OHCHR , UNOG
UN Human Rights Office spokesperson Ravina Shamdasani made the following comment on Friday at the bi-weekly press briefing in Geneva.
1
1
1
Edited News | OHCHR , WHO
Sudan: UN Raises Alarm Over Mass Atrocities in El Fasher as Survivors Report Executions, Killings and Rapes
More details continue to emerge about atrocities committed during and after the fall of El Fasher to the Rapid Support Forces (RSF) in Sudan on 23 October. Since the powerful paramilitary group made a major incursion into the city last week, the UN Human Rights Office has received “horrendous accounts of summary executions, mass killings, rapes, attacks against humanitarian workers, looting, abductions and forced displacement,” said Seif Magango, spokesperson for the Office of the United Nations High Commissioner for Human Rights (OHCHR).
1
1
1
Press Conferences | IFRC , OHCHR , UNDP , WFP , WHO
Rolando Gómez, Chief of the Press and External Relations Section at the United Nations Information Service in Geneva, chaired a hybrid press briefing, which was attended by the representatives and spokespersons of the Office of the High Commissioner for Human Rights, the World Health Organization, the World Food Programme, the United Nations Development Programme, and the International Federation of Red Cross and Red Crescent Societies.
1
1
1
Edited News | OCHA
Ukraine: Russian attacks on energy terrorize population as winter starts; could trigger major ‘crisis within crisis’
The UN’s top aid official in Ukraine expressed concern on Friday about “continuous attacks” on energy production sites and distribution facilities.
1
1
1
Press Conferences | OCHA
The humanitarian situation In Ukraine: winter response, the energy crisis and next steps
1
1
1
Edited News | HRC
Navi Pillay Retires After Decades Defending Human Rights and Pursuing Justice
1
1
1
Edited News | OHCHR , UNOG
The telecommunications shutdowns in Afghanistan in September had serious and far-reaching impacts on people’s lives, according to a briefing paper published today by the UN Human Rights Office and the UN Assistance Mission in Afghanistan (UNAMA).
1
1
1
Edited News | OHCHR , UNOG
UN Human Rights Office spokesperson Jeremy Laurence at the UN Geneva press briefing made the following comment on the ASEAN declaration on the right to a healthy environment.