As we enter May 2023, the global economic situation remains highly uncertain amid an extraordinary confluence of recent shocks that have affected countries across the world. Inflation has remained stubbornly persistent in many countries, directly impacting the lives of the poor, and posing a significant challenge to central bankers around the world.

With the banking sector turmoil rattling global financial markets in March, all eyes have been fixed on the United States Federal Reserve (Fed). By deciding to raise its key policy rate by another 25 basis points late last month, the Fed signaled that the fight against inflation was not over, while underscoring confidence in the domestic banking sector. Though the turmoil in the banking sector is likely to be contained, it is yet another sign of the unanticipated consequences of interest rate increases to battle inflation.

At the moment, policymakers are facing a complex economic context, where macroeconomic policies need to be carefully calibrated to strike a balance between taming inflation, ensuring financial stability supporting economic growth and employment, and managing the consequences of international spillovers.

On 16 May, UN DESA will release the World Economic Situation and Prospect (WESP) as of mid-2023. The mid-year update will provide the latest assessment of the global economic situation, discuss major macroeconomic developments since the launch of the WESP 2023 in January, and present prospects for growth in these uncertain times.

The WESP mid-year update will also discuss the impact of monetary policy stances of the developed economies on the developing countries. While developed economies may be reducing the degree of monetary tightening, developing countries find themselves at different stages of the tightening cycle, thus facing divergent outcomes and policy choices.

The WESP mid-year update will be available at https://desapublications.un.org/ on 16 May. Watch the press briefing live on webtv.un.org at 12:30 pm EDT.

This article originally appeared in UN DESA Voice May 2023, vol.27, No.5.