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Global economic growth is projected to be 2.8 per cent this year, unchanged from last year, according to the United Nations’ World Economic Situation and Prospects (WESP) 2025 report released recently.
While the global economy has demonstrated resilience, withstanding a series of mutually reinforcing shocks, growth remains below the pre-pandemic average of 3.2 per cent, constrained by weak investment, sluggish productivity growth and high debt levels, the report noted.
Global economic growth is projected to be 2.8 per cent this year, unchanged from last year, according to the UN World Economic Situation and Prospects 2025 report.
Lower inflation and ongoing monetary easing in many economies could provide a modest boost to global economic activity this year.
Global trade is likely to grow by 3.2 per cent in 2025 following a rebound of 3.4 per cent in 2024.
Lower inflation and ongoing monetary easing in many economies could provide a modest boost to global economic activity this year. However, uncertainty still looms large, with risks stemming from geopolitical conflicts, rising trade tensions and elevated borrowing costs in many parts of the world, a UN release said citing the report.
These challenges are particularly acute for low-income and vulnerable countries, where sub-par and fragile growth threatens to further undermine progress towards the UN Sustainable Development Goals (SDGs).
Growth in the United States is projected to moderate from 2.8 per cent in 2024 to 1.9 per cent in 2025, as the labour market softens, and consumer spending slows.
Europe is expected to recover modestly, with gross domestic product (GDP) growth increasing from 0.9 per cent in 2024 to 1.3 per cent in 2025, supported by easing inflation and resilient labour markets, though fiscal tightening and long-term challenges such as weak productivity growth and an ageing population, continue to weigh on the economic outlook.
East Asia is forecast to grow by 4.7 per cent in 2025—driven by China’s projected stable growth of 4.8 per cent—supported by robust private consumption across the region.
South Asia is expected to remain the fastest-growing region, with GDP growth projected at 5.7 per cent in 2025, led by India’s robust 6.6 per cent expansion.
Growth in Africa is forecast to rise modestly from 3.4 per cent in 2024 to 3.7 per cent in 2025, thanks to recoveries in major economies including Egypt, Nigeria, and South Africa.
However, conflicts, rising debt-servicing costs, lack of employment opportunities and increasing severity of climate-change impacts weigh on Africa’s outlook.
Global trade is expected to grow by 3.2 per cent in 2025 following a rebound of 3.4 per cent in 2024, driven by improved exports of manufactured goods from Asia and strong services trade. However, trade tensions, protectionist policies, and geopolitical uncertainties are significant risks to the outlook.
Global inflation is projected to decline from 4 per cent in 2024 to 3.4 per cent in 2025, providing some relief to households and businesses.
Major central banks are expected to further cut interest rates in 2025 as inflationary pressures continue to ease. While continuing to moderate, inflation in many developing countries is expected to remain above recent historical averages, with one in five projected to face double-digit levels in 2025, the UN report said.
For developing economies, easing global financial conditions could help reduce borrowing costs, but access to capital remains uneven.
Many low-income countries continue to grapple with high debt-servicing burdens and limited access to international financing, it added.
Fibre2Fashion News Desk (DS)
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