Economic Recovery Losing Steam, Warns UN Labour Agency
January 16, 2025
The global economic recovery is losing momentum, with the number of unemployed workers expected to increase by 3 million this year, according to a new report by the International Labour Organization (ILO).
The ILO’s “World Employment and Social Outlook 2025” report warns that the global unemployment rate is expected to rise to 6.3% in 2025, up from 6.1% in 2024. This translates to an estimated 207 million unemployed workers worldwide.
The report attributes the slowdown in the recovery to several factors, including:
- Weakening global demand: The global economy is facing headwinds from slowing growth in China, the eurozone, and the United States. This is reducing demand for goods and services, leading to job losses in sectors such as manufacturing and trade.
- Supply chain disruptions: The ongoing global pandemic and the Russia-Ukraine war have disrupted supply chains, making it more difficult for businesses to operate and hire workers.
- Inflation: High inflation is eroding purchasing power and reducing consumer spending, further dampening economic growth.
- Tightening monetary policy: Central banks around the world are raising interest rates to combat inflation. This is making it more expensive for businesses to borrow, which can lead to job losses.
The ILO report also warns that the economic slowdown is disproportionately affecting vulnerable groups, such as women, young people, and low-skilled workers.
Director-General of the ILO, Guy Ryder, said: “The global economic recovery is losing steam, and the number of unemployed workers is set to rise. This is a major concern, as unemployment can have devastating consequences for individuals, families, and societies.”
The report calls for governments to take action to support the recovery, including:
- Fiscal stimulus: Governments should provide fiscal stimulus to boost demand and create jobs. This could include infrastructure spending, tax cuts, or direct cash payments to households.
- Monetary easing: Central banks should consider monetary easing to support economic growth. This could involve lowering interest rates or providing liquidity to the financial system.
- Active labour market policies: Governments should implement active labour market policies to help unemployed workers find jobs. This could include job training, placement services, and wage subsidies.
- Social protection: Governments should strengthen social protection systems to provide support for unemployed workers and vulnerable groups. This could include unemployment benefits, food assistance, and housing subsidies.
The ILO report concludes that the economic recovery is at a critical juncture. Governments need to take action to support the recovery and ensure that the benefits of growth are shared by all.
Economic recovery is losing steam, warns UN labour agency
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