The United Nations recently released its World Economic Situation Prospects (WESP) 2023 report, which was jointly prepared by the United Nations Department of Economic and Social Affairs (UN/DESA), the United Nations Conference on Trade and Development (UNCTAD), as well as five regional UN commissions spread across Europe (ECE), Africa (ECA), Latin America & the Caribbean (ECLAC), Asia and the Pacific (ESCAP) and Western Asia (ESCWA). According to the UN’s report, the world economy was subjected in the year 2022 to a multitude of shocks, namely the lingering global effects of the COVID-19 pandemic and the war in Ukraine which has resulted in a disruption in the food and energy markets. In addition, the report commented that the war has aggravated food insecurity and malnutrition in several developing economies. Furthermore, the report stated that high inflation has resulted in a drop in real income and in a global cost-of-living crisis that dragged millions into poverty. The report also revealed that the world is suffering from a climate crisis that induced large economic damages and generated humanitarian crises in many countries. Accordingly, the report noted that the aforementioned shocks are expected to continue to cause disruptions in the year 2023, thereby forecasting a drop in global economic growth from 3.0% in 2022 to 1.9% in 2023 (one of the lowest growth rates registered in recent times). The report, however, forecasted global economic growth to rise back to 2.7% in 2024 under the expectation that some “macroeconomic headwinds” begin to weaken next year. Always in this regard, the report revealed that growth momentum was dull in large economies such as the United States of America and the European Union affecting as such the rest of the world economy. The report noted that the short-term economic outlook for Europe has rapidly weakened as the war in Ukraine persists. More specifically, the report revealed that several European countries are expected to undergo a mild recession amid the high energy costs, high inflation and tighter financial conditions.

On a regional front, the report expected economies of oil producing countries in Western Asia to recover from the slump that began in 2019, benefitting from high prices and rising oil output, and from the recovery of the tourism sector. Recovery in oil importing countries, however, remained weak amid the tightening access to international finance and harsh fiscal constraints. Accordingly, the report projected the average economic growth in Western Asia to drop from 6.4% in 2022 to 3.5% in 2023. The report added that the countries within the region are experiencing larger food security concerns amid their high reliance on wheat imports from Russia and Ukraine. In figures, the report anticipates GDP growth for net fuel exporters to drop from an estimated 7.5% in the year 2022 to 3.6% in 2023 and 3.4% in 2024 buoyed by less favorable external factors. On the other hand, the UN estimated growth for net fuel importers to slow from 5.3% in 2022 to 3.5% in 2023 and 3.3% in 2024.

As far as Lebanon is concerned, the report estimated the Lebanese economy to have bounced back in 2022 to a growth of 5.7% in 2022 compared to an economic contraction of 11.7% in 2021. According to the WESP report, Lebanon is heavily affected by external factors such as larger import bills amid rising commodity prices and the depreciation of the Lebanese Pound against the US Dollar which have altogether added to inflationary pressures in the country. In figures, inflation in Lebanon rose from 150.7% in 2021 to 176.4% in 2022. The report also revealed that the most recent estimate of unemployment rates in Lebanon stood at 29.6%, compared to 11.4% recorded before the onset of the ongoing financial crisis in 2019. From another standpoint, the report estimated that food prices in Lebanon have increased by 332% y-o-y in 2022. The report commented in this respect that Lebanon imports more than 50% of cereal needs from Russia and Ukraine, noting that the damaged silos from the Beirut port explosion in 2020 have severely impeded Lebanon’s ability to store grain. The report noted in this regard that Lebanon has prepared a plan to rebuild the Beirut port storage facilities and to support local farmers to increase domestic supply. The report stated that the Lebanese economy is forecasted to grow by 4.6% in 2023 and by 4.4% in 2024, with inflation levels expected to attain 50.7% and 21.6% over the same period.