The connection between economic development and contemporary challenges is extremely complex and dynamic considering the various factors that shape the modern business environment. Economic development is the main driver of progress and well-being of society; it encompasses various aspects of growth and improvement of living standards. However, the modern world faces a number of challenges that can have a significant impact on economies around the world. The world economy is under great pressure from global, technological, social and environmental crises. After two years of the coronavirus pandemic, the current war between Ukraine and Russia and inflation, many people, companies and countries are faced with the problems of the global economic slowdown. The goal of this paper is to analyse contemporary challenges in economic development and consider their impact. The paper will explain in detail contemporary challenges and analyse some of the most significant problems currently affecting the world economy, which include population growth, inflation, the conflict between Ukraine and Russia, climate change, changes in technology and the consequences of the pandemic. New challenges increase the difficulty of fulfilling critical needs such as social protection, food and resource security and climate adaptation, particularly in the light of the pandemic's weakening of the foundations. Without adequate coordination mechanisms or international policy responses, the various shocks and weaknesses of current economies may turn into systemic disasters in the future.