Global economic growth will continue to be constrained as uncertainty lingers, UN report warns
Lower inflation and monetary easing provide relief, but trade tensions
High debt burden and geopolitical risks cloud outlook
New York, January 9, 2025 – According to the UN’s flagship report, World Economic Status and Prospects (WESP) 2025, released today, the global economic growth rate will remain at 2.8% in 2025, unchanged from 2024. It is predicted that there will be no. The global economy has withstood a series of mutually reinforcing shocks and has shown resilience, but growth remains at pre-pandemic averages due to weak investment, slowing productivity growth and high debt levels. It is below 3.2%.
The report notes that lower inflation rates and continued monetary easing in many countries could provide some stimulus to global economic activity in 2025. However, significant uncertainties remain, including risks posed by geopolitical conflicts in many parts of the world, rising trade tensions, and rising borrowing costs. world. These challenges are particularly acute for low-income and fragile countries, where below-average and fragile growth threatens to further undermine progress towards the Sustainable Development Goals (SDGs).
“Countries cannot ignore these risks. In our interconnected economy, a shock in one side of the world increases prices in the other. Every country is affected and this We must build on the progress made and be part of the solution,” said UN Secretary-General António Guterres in the report’s foreword. “We have set the course. Now it’s time to deliver. Together, let’s make 2025 the year that puts the world on track for a prosperous and sustainable future for all.”
Regional economic outlook: different growth prospects
U.S. growth is expected to slow from 2.8% in 2024 to 1.9% in 2025 due to a softening labor market and slowing consumer spending. Although Europe faces long-term challenges such as fiscal tightening, slowing productivity growth, and an aging population, the GDP growth rate will increase from 0.9% in 2024 to 2025, supported by easing inflation and the resilience of the labor market. It is expected to recover moderately to 1.3% in 2020. , will continue to weigh on the economic outlook.
East Asia is expected to grow by 4.7% in 2025, supported by strong consumer spending across the region and driven by China’s projected steady growth of 4.8%. South Asia is expected to remain the fastest growing region, with GDP growth expected to be 5.7% in 2025, led by India’s strong growth of 6.6%. Africa’s growth rate is expected to rise moderately from 3.4% in 2024 to 3.7% in 2025 due to recovery in major economies such as Egypt, Nigeria and South Africa. However, conflicts, rising debt servicing costs, a lack of employment opportunities and the worsening effects of climate change weigh on Africa’s outlook.
Trade recovery and monetary easing
Global trade is expected to grow by 3.2% in 2025, after recovering by 3.4% in 2024 on improving manufactured goods exports from Asia and strong services trade. However, trade tensions, protectionist policies and geopolitical uncertainty pose significant risks to the outlook. The global inflation rate is predicted to fall from 4% in 2024 to 3.4% in 2025, providing some sense of security for households and businesses. Major central banks expect further interest rate cuts in 2025 as inflation pressures continue to ease. Although inflation rates in many developing countries continue to ease, they are expected to remain above recent historical averages, with one in five countries expected to face double-digit levels by 2025.
Threats from high debt service burdens and rising food inflation
For developing countries, easing global financial conditions may help reduce borrowing costs, but access to capital remains uneven. Many low-income countries continue to suffer from high debt service burdens and limited access to international financing. The report emphasizes that governments should use the fiscal space created by monetary easing to prioritize investment in sustainable development, particularly in critical social sectors.
Despite easing global inflation, food inflation remains high, with almost half of developing countries expected to have inflation rates above 5% in 2024. This has exacerbated food insecurity in low-income countries already facing extreme weather, conflict and economic instability. The report warns that sustained food inflation and slowing economic growth could push millions further into poverty.
Critical minerals: a key opportunity to accelerate sustainable development
The report highlights the potential of critical minerals for the energy transition, such as lithium, cobalt and rare earth elements, and their potential to accelerate progress towards the SDGs in many countries.
For resource-rich developing countries, rising global demand for critical minerals presents a unique opportunity to foster growth, create jobs and increase public revenues to invest in sustainable development. Masu. However, the report warns that these opportunities come with significant risks. Poor governance, unsafe labor practices, environmental degradation and over-reliance on volatile commodity markets can exacerbate inequalities, harm ecosystems and undermine long-term development gains. there is.
“Critical minerals have immense potential to accelerate sustainable development, but only if they are managed responsibly,” said Junhua Li, UN Under-Secretary-General for Economic and Social Affairs. says. “Governments need forward-looking policies and comprehensive policies to promote sustainable mining, fair benefit sharing, investment in capacity building, and to maximize the development benefits from these resources. We need to adopt a regulatory framework.”
Call for bold multilateral action
The report calls for bold multilateral action to address the interconnected crises of debt, inequality and climate change. Monetary easing alone will not be enough to reinvigorate global growth or close growing inequality. Governments need to avoid overly restrictive fiscal policies and instead focus on mobilizing investment in clean energy, infrastructure, and critical social sectors such as health and education.
Increased international cooperation is also essential to managing the environmental, social and economic risks associated with critical minerals. Enabling developing countries to use these resources responsibly and equitably requires harmonized sustainability standards, fair trade practices and technology transfer.
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The report will be published on https://www.bit.ly/UN_WESP2025 and desapublications.un.org on January 9th at 12:30pm EST once the embargo is lifted.
Hashtag: #World Economic Report
Media contact:
Alex Del Castello, United Nations Department of Global Communications, alexandra.delcastello@un.org
Helen Rosengrenh, United Nations Department of Economic and Social Affairs, rosengrenh@un.org
