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 | OCHA , UNHCR , WHO
The past two months of intensifying Israeli bombardment in Lebanon have been the “deadliest and most devastating” in decades as communities uprooted from the front line have continued to flee across the border to Syria, UN humanitarians said on Friday.
1
1
1
Press Conferences | OCHA , WHO , UNHCR , IFRC , ILO , UNCTAD
Alessandra Vellucci of the United Nations Information Service (UNIS) in Geneva, chaired the hybrid briefing, attended by spokespersons and representatives of the United Nations Office for the Coordination of Humanitarian Affairs, the World Health Organization, the United Nations High Commissioner for Refugees, the International Federation of the Red Cross, the International Labour Organization and the United Nations Trade and Development.
2
1
3
Edited News | UNOG
“State of Silence”: Diego Luna brings the fight to protect the press to the UN in Geneva
Mexican actor, producer and director Diego Luna has brought his fight to protect journalists all the way to the United Nations, in Geneva. Together with documentary director Santiago Masa, he is putting a spotlight on the silencing of investigative journalism in his country, and on the incredibly high price that many journalist have to pay in pursuit of truth.
1
1
1
Edited News | OHCHR , UNOG
“Today marks the grim milestone of 1,000 days since the Russian Federation launched its full-scale armed attack on Ukraine. Our Office has verified that at least 12,162 civilians have been killed since 24 February 2022, among them 659 children. At least another 26,919 civilians have been injured,” UN Human Rights spokesperson Jeremy Laurance told the bi-weekly press briefing in Geneva.
1
1
1
Edited News | OHCHR , UNOG
With COP29 in Baku now in its second - and final - week, UN Human Rights Chief Volker Türk has reiterated his call for urgent human rights-based climate action.
1
1
1
Edited News | UNIFIL , UNICEF , WHO
Lebanon: Increased violence along Blue Line and ‘horrific new normal’ for children
In southern Lebanon, peacekeepers have witnessed “shocking” destruction of villages along the Blue Line and ever-deeper Israeli ground incursions, while the situation of children across the country is becoming increasingly desperate, the UN said on Tuesday.
1
1
1
Press Conferences | ITU , OSE , UNIFIL , UNICEF , OHCHR , WHO , FAO
Rolando Gómez of the United Nations Information Service (UNIS) in Geneva, chaired hybrid briefing, attended by spokespersons and representatives of United Nations Interim Force in Lebanon, the United Nations Children’s Fund, the Office of the High Commissioner for Human Rights, the World Health Organization, the Food and Agricultural Organization, and the International Telecommunication Union.
2
1
2
Press Conferences , Edited News | UNRWA
The head of the UN agency for Palestine refugees, UNRWA, confirmed on Monday that a large convoy of humanitarian aid was looted inside Gaza at the weekend, amid a near-total a breakdown in law and order and harassment of the agency’s staff by Israeli soldiers.
1
1
1
Edited News | OCHA
In the nearly 1,000 days since Russia’s full-scale invasion of Ukraine, thousands of civilians have been killed, the country’s energy infrastructure is on the brink and drones terrify communities on the front line, the UN’s top aid official in the country said on Friday.
1
1
1
Press Conferences | OCHA , WHO
UN Geneva briefing: Ukraine's humanitarian crisis deepens, with 12,000 dead and 3.6M displaced.
2
1
2
Press Conferences , Edited News | OHCHR
Mexican actor, producer and director Diego Luna took a break from the big screen on Thursday to highlight the dangers faced by journalists in his country and beyond, condemning murders of reporters everywhere as “a scandal”.
1
1
1
Edited News | UNRWA
Gaza: ‘People are losing hope’ as aid access is refused to north, warns UNRWA
Besieged northern Gaza is a place of dead bodies lying in the streets and hospitals running out of blood packs – a situation that’s “nothing short of catastrophic”, the UN agency for Palestinian refugees (UNRWA) said on Tuesday.