United Nations Conference on Trade and Development (UNCTAD) published the Trade and Development Report Update (April 2024)

Posted 17 Apr 2024

2 min read

Report highlights challenges to global merchandise trade, impact of developed economies’ monetary policy and global debt crisis.

Global trade: In 2023, global merchandise trade fell by about 1% in real terms, partly due to trade tensions among some large economies, subdued global demand and disruptions in key shipping routes.

Monetary policy impact on developing economies: Factors that have amplified the impact of rapid and simultaneous tightening of monetary policy by major developed economies include:
- Higher debt servicing costs and difficulty in securing new financing options.
- Increase in interest rates in developed world depreciating developing countries’ currencies.
- Double digit interest rates by central banks of many developing countries had adverse impact on domestic demand, employment and household incomes.

Global Debt Crisis: Developing countries’ governments are struggling under increasing debt payment obligations.
- In 2022, they paid $50 billion more to external creditors than they received in new loans.
- 2022 marks the first occurrence of a net negative resource transfer (more resources have gone to developed countries from developing countries) for all developing countries as a group since 2008.
- By 2023, nine low income countries had fallen into debt distress, with additional 25 on the brink.

IMF (International Monetary Fund) Executive Board endorsed reforms to promote the IMF’s capacity to support countries undertaking Debt Restructurings, given the ongoing global sovereign debt challenges.
Reforms are designed to support the existing architecture for debt resolution. However, by streamlining processes, the IMF aims to facilitate timely and effective interventions during debt crises.