UN report labels China ‘a bright spot’

China will outpace Western economies this year, having abandoned its zero-Covid rules and eased monetary and fiscal policy, a United Nations’ report has predicted.

Growth in the world’s second-largest economy is projected to “moderately” improve in 2023 after a weaker-than-expected performance last year, hampered by severe lockdowns.

Beijing’s GDP growth is projected to pick up from 3% last year to 4.8% in 2023, according to The World Economic Situation and Prospects report, published on Wednesday. The UN expects the reopening of the Chinese economy to be “bumpy” as growth is likely to “remain below the pre-crisis” rate of 6% to 6.5%.

Meanwhile, the outlook for the EU in 2023 has “sharply deteriorated” as the energy and cost-of-living crises push member states into a “mild” recession during winter. The report finds that gross domestic product in the EU will grow by a mere 0.2%, sharply down from 3.3% in 2022.

The US economy is projected to expand by only 0.4% in 2023, compared to estimated growth of 1.8% in 2022.

Overall global economic growth will decline from 3% in 2022 to 1.9% in 2023, marking one of the lowest rates in recent decades.

“The near-term economic outlook remains highly uncertain, however, as myriad economic, financial, geopolitical and environmental risks persist,” the report said, adding that global growth will “moderately” recover to 2.7% in 2024 if “macroeconomic headwinds begin to subside next year.”

Earlier, UN Secretary General Antonio Guterres warned that a “severe slowdown” of the global economy looms large amid high inflation, aggressive monetary tightening and “heightened uncertainties”. He added that many economies “are at risk of falling into recession, having barely recovered from the shock of the pandemic.”

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