United Nations - Trade and Development Report

In its Trade and Development Report, the United Nations Conference on Trade and Development (UNCTAD) warns that the global economy faces multiple shocks in 2022, from energy markets to supply chains, climate and geopolitics. Inflation has become a major concern for policymakers, and the main policy tool to address the issue is monetary tightening. However, this approach carries short- and long-term risks, leading to declining wages, falling employment and government revenues, and reversing pandemic pledges to build a more sustainable, resilient, and inclusive world. Developing countries are particularly impacted by the policy decisions of advanced economies, and 46 developing countries are exposed to severe financial pressures due to the high cost of food, fuel and borrowing. Policy measures to address these risks are known and require political will and multilateral coordination to be put into action. These include a mix of policy tools to address inflationary pressures, a fairer and more permanent use of Special Drawing Rights, and discussions on a multilateral legal framework for handling debt restructuring. The UNCTAD warns that if the current moment for multilateral reform is not seized, the multilateral system will remain at risk of further fracture.