In photo: People of Panthau, Northern Bahr al Ghazal, South Sudan. Developing nations are facing mounting economic challenges. (Photo: AFP/VNA)

The report, titled “Trade and Development Report 2024: Rethinking Development in the Age of Discontent,” calls for a fundamental rethinking of global development strategies as low growth, high debt, and weak investment and trade deepen the divide between industrialized and developing nations.

Developing countries have been deeply affected by the COVID-19 pandemic and following crises, said UN Trade and Development Secretary-General Rebeca Grynspan. Although some developing economies show promising growth, the overall picture in the Global South is one of weak growth, growing exposure to global shocks and the risk of trade fragmentation.

"Rising debt has left many developing nations with very little fiscal space, making structural reforms to boost productivity and resilience more difficult, further weakening their growth prospects. Countries face impossible choices, between servicing the debt and investment in development and economic transformation," Grynspan added. 

UNCTAD's report underscored the emergence of a "low normal" in global economic growth, with rates projected to remain at just 2.7% for 2024 and 2025, down from an annual average of 3.0% between 2001 and 2019. This is a stark contrast to the 4.4% average growth seen in the years leading up to the global financial crisis, it noted.

For developing economies, this slowdown is more acute. While they grew at an impressive 6.6% during 2003-2013, their average growth has since fallen to just 4.1% between 2014 and 2024. At the same time, their debt burdens have surged by 70% between 2010 and 2023.