Global Economy Faces 2.3% Growth Slowdown Amid Trade Tensions

The world economy is heading towards a recessionary path, with global growth projected to slow to just 2.3 per cent in 2025, the United Nations Conference on Trade and Development (UNCTAD) warned in a new report released on April 16, 2025.

The report, titled Trade and Development Foresights 2025 – Under Pressure: Uncertainty Reshapes Global Economic Prospects, painted a bleak picture of mounting economic pressures. It cited escalating trade tensions, financial volatility and deepening uncertainty as key factors behind the expected slowdown.

UNCTAD noted that a late-2024 recovery in trade, partly driven by front-loaded orders, was unlikely to continue. Rising trade tensions are impacting global trade, with the trade body noting that recent tariff measures are disrupting supply chains and undermining predictability. “Trade policy uncertainty is at a historical high,” the report noted, “and this is already translating into delayed investment decisions and reduced hiring.”  

Developing countries were expected to bear the brunt of these shifts. Many low-income nations faced what the report described as a “perfect storm” of challenges: Weakening domestic growth, worsening external financial conditions and rising debt burdens. UNCTAD warned that these vulnerabilities threatened to reverse hard-won development gains.

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