New York [US]: The global economy is poised for a slowdown, with growth projected to decelerate to 2.4% in 2025, down from 2.9% in 2024, according to the United Nations’ World Economic Situation and Prospects (WESP) mid-2025 update.
The report attributes the decline to surging trade barriers, especially rising U.S. tariff rates, mounting policy uncertainty, and weakening consumer demand in key economies.
Key Highlights from the Report:
- Global GDP Growth (2025):
Slated to fall to 2.4%, 0.4 percentage points below the January 2025 projection. - United States:
Growth expected to decelerate from 2.8% in 2024 to 1.6% in 2025, as elevated tariffs and policy instability dampen investment and consumption. - China:
Forecasted to grow 4.6% in 2025 due to sluggish consumer sentiment, property sector instability, and export manufacturing disruptions. - India:
Despite a downward revision to 6.3%, India remains among the fastest-growing large economies, reflecting resilience amid global volatility. - Other Developing Nations (Brazil, Mexico, South Africa):
Also facing growth downgrades amid falling commodity prices and reduced investment inflows. - European Union:
Growth remains flat at 1.0%, with weak exports and tightening trade conditions weighing on recovery.
Concerns Highlighted by the UN:
- Tariff Shock:
The sharp rise in trade tariffs, particularly by the U.S., is expected to disrupt supply chains, raise costs, and fuel financial volatility. - Food Inflation:
Averaging above 6%, food price spikes are disproportionately hurting low-income households, especially in Africa, South Asia, and Western Asia. - Debt & Development Risk:
UN Under-Secretary-General Li Junhua warned that the tariff-driven slowdown may exacerbate debt burdens, hindering investment in sustainable development for vulnerable countries.
“The tariff shock risks hitting vulnerable developing countries hard, slowing growth, slashing export revenues, and compounding debt challenges,” Junhua said.
Policy Recommendations:
The UN urged coordinated global responses, including:
- Credible monetary policies
- Targeted fiscal support
- Long-term investment strategies
to help stabilize prices, mitigate shocks, and protect the world’s most vulnerable populations.