Fri, 22 Sep 2023

GENEVA, 16th September, 2023 (WAM) - As world leaders head to New York for the UN high-level week to discuss how to advance the Sustainable Development Goals (SDGs), a new World Economic Forum report highlights the challenges facing developing countries, with six in 10 economists surveyed warning of a deepening trade-off between development and climate action.

The latest Chief Economists Outlook, released today, also finds that over 60% of chief economists expect the global economy to weaken in the coming year amid uncertain domestic and international politics and unsettled financial markets. Although a large majority (86%) expects the recent global inflationary surge to ease, the prolonged tightening of financial conditions is expected to have lasting impacts, including a squeeze on business lending, increases in corporate debt defaults, and potential corrections in property and equity markets.

Developing countries face the most acute effects of these global headwinds, with chief economists warning that progress towards global development goals could be undermined by geopolitical tensions (74%) and tighter financial conditions (59%). This is particularly concerning with slowing progress in many areas of the SDGs, including food security, climate action and biodiversity protection. At the current pace, more than half a billion people will still live in extreme poverty in 2030.

A minority of chief economists expect increased cooperation (41%) and private capital flows (30%) between advanced and developing countries over the next three years. However, if flows of private capital can be unlocked, the economists are particularly optimistic about the potential positive impact on specific areas of development: digital transformation (97%), energy access and affordability (76%), food systems and nutrition (67%), and climate change, biodiversity loss and pollution (67%).

"The latest Chief Economists Outlook points to continuing weakness in the global economy," said Saadia Zahidi, Managing Director, World Economic Forum. "It also highlights the urgent challenges and trade-offs being faced by developing countries, and the need for innovation, cross-border investment and technology transfer to make growth, climate action and human development compatible."

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