UNCTAD proposes 5 recommendations to protect global economy

The United Nations Conference on Trade and Development (UNCTAD) recommends five policy actions to protect the global economy, Report informs referring to an update to the UNCTAD Trade and Development report.

UNCTAD recommends greater, more concessional and less conditional, multilateral financial support for developing countries to enable them to withstand financial and economic shocks and increase investment to support economic growth.

This also includes immediate debt relief for Ukraine along with renewed discussions on a multilateral mechanism that promotes the fair and orderly restructuring of developing country sovereign debt during periods of severe financial stress.

More use of Special Drawing Rights is also recommended to supplement official reserves and to provide liquidity on a timely basis to avoid severe deflationary adjustments.

UNCTAD believes that more effective and less ad hoc swap arrangements between central banks will support developing country currencies and address financial crises.

Sector-specific policies including price controls and subsidies, are recommended to tackle the supply-side and mark-up pressures on inflation.

“UNCTAD’s rapid assessment of the impact of war in Ukraine on trade and development confirmed a rapidly worsening outlook for the world economy, underpinned by rising food, fuel and fertilizer prices, heightened financial volatility, sustainable development divestment, complex global supply chain reconfigurations and mounting trade costs,” reads the report.