"Annual growth across large parts of the global economy will fall below the performance registered before the pandemic and well below the decade of strong growth before the global financial crisis – with a potentially devastating effect on the economies of developing countries," UNCTAD said. "This will further deepen the cost-of-living crisis that their citizens are currently facing and magnify inequalities worldwide."
According to UNCTAD, developing economies broadly include Africa, Latin America and the Caribbean, Asia without Israel, Japan, and South Korea, and Oceania without Australia and New Zealand. UNCTAD, which expects global growth in 2023 to drop to 2.1%, compared to the 2.2% projected in September 2022, also called for a reform of the global debt architecture, stronger financial regulations and greater liquidity to support developing countries.
The U.N. body found that 81 developing countries, excluding China, had lost $241 billion in international reserves in 2022, an average decline of 7%. "Even if financial conditions stabilize, the slowdown in economic growth in many developing countries combined with the end of the cheap money era points to future rounds of debt distress," UNCTAD said. (Reporting by Gabrielle Tétrault-Farber; Editing by Christina Fincher)
