Economic Recovery is Losing Steam, Warns UN Labour Agency
Published by: Economic Development
Date: January 16, 2025 12:00 PM
Content:
The United Nations International Labour Organization (ILO) has released a new report warning that the global economic recovery is slowing down. The report, titled “World Employment and Social Outlook 2023: Strengthening the recovery, creating decent jobs,” found that global employment growth is expected to slow from 2.3% in 2023 to 1.9% in 2024.
The ILO report cites a number of factors that are contributing to the slowdown in economic growth, including the war in Ukraine, rising inflation, and tightening monetary policy. The war in Ukraine has disrupted global trade and energy supplies, leading to higher prices and reduced economic activity. Rising inflation is eroding consumer purchasing power and dampening business investment. And tightening monetary policy by central banks around the world is increasing borrowing costs and slowing economic growth.
The slowdown in economic growth is expected to have a negative impact on the labor market. The ILO report estimates that the global unemployment rate will rise from 5.7% in 2023 to 5.8% in 2024. This translates into an additional 2.5 million people unemployed worldwide.
The ILO report also warns that the rising cost of living is putting a strain on households and businesses. The report estimates that the global inflation rate will average 6.8% in 2023 and 5.5% in 2024. This is well above the pre-pandemic average of 3.5%. Rising inflation is eroding consumer purchasing power and dampening business investment.
Policy Recommendations
The ILO report calls on governments to take action to support the economic recovery and create decent jobs. The report recommends that governments:
- Increase public investment in infrastructure, education, and healthcare. This will help to create jobs and boost economic growth.
- Provide tax breaks and other incentives to businesses to encourage hiring and investment.
- Strengthen social safety nets to protect the most vulnerable workers from the impact of the economic slowdown.
The ILO report also calls on international organizations to work together to coordinate the global response to the economic slowdown. The report recommends that international organizations:
- Provide financial assistance to countries that are struggling to cope with the economic slowdown.
- Coordinate efforts to promote trade and investment.
- Work together to address the global food and energy crisis.
Conclusion
The ILO report warns that the global economic recovery is slowing down. This slowdown is expected to have a negative impact on the labor market, leading to higher unemployment and lower wages. The ILO calls on governments and international organizations to take action to support the economic recovery and create decent jobs.
Economic recovery is losing steam, warns UN labour agency
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