UNITED NATIONS The United Nations has slashed its global economic growth forecast for 2025 to 2.4%, down from 2.9% in 2024, citing rising geopolitical instability, prolonged trade tensions, and a fragile post-pandemic recovery.
According to the World Economic Situation and Prospects mid-year report, released Thursday in New York, the global economy is entering a phase of heightened uncertainty, with both advanced and developing nations grappling with inflation volatility, currency instability, and stagnant productivity.
“The world economy is at a crossroads,” said Li Junhua, UN Under-Secretary-General for Economic and Social Affairs. “Mounting political divisions and fractured global cooperation are beginning to take a heavy toll on trade and investment flows.”
The report identifies four major risk zones:
- U.S.–China decoupling and sanctions escalation
- Ongoing wars in Ukraine and Gaza
- Rising interest rates across Western economies
- Sharp slowdowns in China’s real estate sector and Europe’s manufacturing output
The UN also warns that developing economies particularly in Africa, South Asia, and Latin America could face worsening debt distress, food insecurity, and weakened currencies due to capital flight and reduced global demand.
Despite these pressures, a few bright spots remain. The report notes that green energy investment is growing, and digital economies in Southeast Asia and Africa are expanding faster than expected. However, these gains are not enough to offset broader structural weaknesses.
“Multilateral cooperation is critical,” the UN emphasized, urging G20 nations and financial institutions to stabilize markets and support vulnerable economies through debt relief, technology transfers, and fair trade practices.
Global markets responded cautiously to the report, with Asian indices dipping slightly and European bonds rallying amid expectations of policy easing.
