The United Nations recently released its World Economic Situation Prospects (WESP) 2024 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 demonstrated resilience during the year 2023 in the face of a multitude of headwinds, namely the monetary tightening policies, conflicts and climate change. In details the report pointed out that this resilience was illustrated by a robust consumer spending in developed economies, backed by strong labor market, and a receding inflationary environment on the back of dropping food and energy prices. The report warned, however, that this resilience is masking several short-term risks, namely the still high inflationary levels in some countries, coupled with the prospects of a further propagation of the conflict in the Middle East, and its repercussions on energy markets and inflation levels. Added to that is major central banks’ intentions to keep interest rates at their current high levels for some time, which means that high borrowing costs and tighter credit conditions are here to linger. Accordingly, the report anticipated world economic growth to drop from 2.7% in 2023 to 2.4% in 2024, and it increase back to 2.7% in 2025, yet remain well below the pre-pandemic average of 3.0%. In the same vein, the report commented that whilst the global economy managed to avoid a recession during the year 2023, the upcoming period will most likely be characterized by low growth levels. In details, growth prospects for developing and low-income countries seem bleak, and developed countries being no better, with the economy of the United States, the Euro Area, Japan and the Commonwealth of Independent States expected to either grow timidly or to drop.   

On a regional front, the report commented that economies of oil producing countries in Western Asia experienced a sharp slowdown in 2023, as OPEC+ countries resorted to production cuts in an endeavor to support oil prices. Nevertheless, oil prices during 2023 remained below 2022 averages. Said drop in oil production outweighed the growth in non-hydrocarbon sectors for most GCC economies. As a result, economic growth in oil producing countries slumped from 7.6% in 2022 to 0.5% in 2023, yet is expected to recover to 3.1% in 2024 and 4.0% in 2025. As for oil-importing countries, the host of political conflicts have driven economic growth down to 3.0% in 2023 from 5.4% in 2022, with growth expected to further deteriorate to 2.7% in 2024 before improving slightly to 3.3% in 2025. Overall, economic growth for West Asian economies dipped to 1.7% in 2023 down from 6.5% in 2022, and is expected to recover to 2.9% and 3.7% in 2024 and 2025 respectively.    

As far as Lebanon is concerned, the report commented that GDP contracted by 0.2% during the year 2023, notwithstanding the flamboyant tourism season and robust remittance flows, which aided consumption levels. The country is still plagued by the absence of basic services, weak infrastructure and the prevalence of multiple exchange rates. Going forward, the Lebanese economy is expected to grow by 1.7% in 2024 and 3.8% in 2025. From another standpoint, the report commented that inflation increased from 171.2% in 2022 to 230.4% in 2023, and is expected to stand at elevated levels of 78.1% in 2024 and 30.7% in 2025.