Global Unemployment Rate To Fall By 0.1 Percentage Points In 2023

The ILO’s latest estimates project that the global unemployment rate will fall by 0.1 percentage points in 2023. 

This implies a decline in the total number of globally unemployed people of 1 million, which is due to greater-than-anticipated labour market resilience in high-income countries in the face of the economic slowdown.

There are signs that further interest rate hikes in high-income countries will be limited as central bankers start to prioritize concerns about the health of the economy. Interest rates in many low- and middle-income countries are expected to remain stable or decline. Nevertheless, the risk of the global economy entering a recession remains sizeable, creating a major downside risk for global labour markets. 

Monetary policy tightening also raises the risk of financial instability, which could have a major impact on the labour market.  This is an improvement compared to previous projections from January when estimates indicated an increase of 3 million.

The downward revision is due primarily to newly incorporated unemployment data from Indian labour force surveys, showing that the Indian unemployment rate declined sharply in 2021 and 2022, falling to 4.8 per cent, which is almost 2 percentage points below its level of 2019 (6.5 per cent). Yet, even when excluding India, the global unemployment rate is projected to fall back to its pre-pandemic level in 2023. a recession remains sizeable, creating a major downside risk for global labour markets (IMF 2023). 

Global estimates of unemployment for the years 2020 through 2022 have been revised substantially in light of new data.

Consequently, global unemployment in 2022 is now estimated at 192 million, compared to 205 million reported in ILO's WESO Trends 2023. 

"In 2023, global unemployment is projected to fall to 191 million, corresponding to an unemployment rate of 5.3 per cent. The global recovery in unemployment rates following the COVID-19 crisis has been remarkably fast compared to previous crises such as the global financial crisis of 2008–09, the eleventh edition of ILO Monitor on the World of Work says.

*Excerpts from the ILO World of Work Report