The United Nations Department of Economic and Social Affairs recently raised its global economic growth forecast for this year to 2.7 percent from the 2.4 percent it made at the start of the year. It raised the growth forecast for developed economies from 1.3 percent to 1.6 percent, and for developing economies from 4.0 percent to 4.1 percent. Earlier, the International Monetary Fund had also raised the growth prospects for advanced economies, emerging markets and developing economies.
The UN and IMF reports have both attached great importance to the role of advanced economies in driving global economic growth. The IMF, for example, noted that global economic expansion will stem from the “surprisingly strong growth in the United States as the world’s largest economy”, while the UN report highlighted the role of North America, Europe and Japan, saying unemployment in these regions is near record lows.
Despite improving growth expectations for developing economies, the two institutions, however, highlighted the fact that “developing economies continue to struggle with high inflation”, stressing that many of them are facing higher borrowing costs, persistent exchange rate pressures, and political instability.
However, it must be noted that developing and developed economies are not at the same starting line. Because of their weaker foundation, developing countries are suffering more because of rising global geopolitical tensions and the spillover effects of the conflicts in Gaza and Ukraine. In the post-pandemic recovery, emerging market and developing economies not only have to face the test of their own economic difficulties, but also have to deal with the impact of the US and European monetary policies on the rest of the world.
It is a hard-won performance for developing economies to improve their growth prospects in this context. This shows that they have not only grasped the favorable conditions of the recovery of developed economies and global trade, fully tapped the potential of their large population and market demand, but also hedged the negative spillover effects of US and European monetary policies. In recent years, emerging market and developing economies have experienced the severe test of the aggressive interest rate hikes of the US dollar, local currency depreciation and capital outflow, but they have generally showed great resilience.
In the face of the challenges, developing economies represented by China have tightened their bonds of cooperation while steadfastly promoting trade and investment liberalization and facilitation, and ensuring the resilience and stability of global industry and supply chains. They have also strengthened policy coordination and development cooperation, and enhanced the resilience of global economic growth.
It can be expected that the continuous progress of later-developing countries will contribute more to the sustained and healthy development of the world economy.