Global Economic Growth to Remain Subdued in 2025, UN Report Warns
The global economy is projected to grow at a modest 2.8 percent in 2025, unchanged from 2024, according to the United Nations World Economic Situation and Prospects 2025 report. Despite falling inflation, improving labor market conditions, and monetary easing, the world economy continues to face meaningful uncertainties, with growth remaining below pre-pandemic levels.The report, released on January 9, 2025, highlights that while lower inflation and ongoing monetary easing could provide a modest boost to global economic activity, risks such as geopolitical conflicts, rising trade tensions, and elevated borrowing costs persist. these challenges are especially acute for low-income and vulnerable countries, where fragile growth threatens progress toward the Sustainable Development Goals (sdgs).
Regional Growth Outlook
Table of Contents
| region | 2024 Growth (%) | 2025 growth (%) | Key Drivers |
|——————-|———————|———————|———————————————————————————|
| United States | 2.8 | 1.9 | Softening labor markets, slowing consumer spending |
| Europe | 0.9 | 1.3 | Easing inflation, resilient labor markets, though fiscal tightening persists |
| East Asia | 4.7 | 4.7 | China’s stable growth (4.8%), robust private consumption |
| South Asia | 5.7 | 5.7 | India’s expansion (6.6%) |
| Africa | 3.4 | 3.7 | Recoveries in Egypt,Nigeria,and South Africa |
The United States is expected to see growth moderate from 2.8 percent in 2024 to 1.9 percent in 2025, as labor markets soften and consumer spending slows. Europe, meanwhile, is forecast to recover modestly, with GDP growth rising from 0.9 percent in 2024 to 1.3 percent in 2025,supported by easing inflation and resilient labor markets. However, long-term challenges such as weak productivity growth and an ageing population continue to weigh on the region’s economic outlook.
In East Asia, growth is projected at 4.7 percent in 2025, driven by China’s stable expansion of 4.8 percent and robust private consumption across the region. South Asia remains the fastest-growing region, with GDP growth projected at 5.7 percent in 2025, led by India’s 6.6 percent expansion. Africa is expected to grow modestly from 3.4 percent in 2024 to 3.7 percent in 2025,thanks to recoveries in major economies such as Egypt,Nigeria,and South Africa.
Inflation and Debt Challenges
Global inflation is projected to decline from 4 percent in 2024 to 3.4 percent in 2025, providing some relief to households and businesses. Major central banks are expected to further cut interest rates as inflationary pressures ease. However, inflation in many developing countries is expected to remain above recent ancient averages, with one in five projected to face double-digit levels in 2025.
Food inflation remains a critical concern, with nearly half of developing countries experiencing rates above 5 percent in 2024. “This has deepened food insecurity in low-income countries,” the report warns. 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.
Calls for Bold Action
The report emphasizes that governments should seize fiscal opportunities created by monetary easing to prioritize investments in sustainable development,particularly in critical social sectors such as health and education. It calls for bold multilateral action to address the interconnected crises of debt, inequality, and climate change.
“Monetary easing alone will not be sufficient to reinvigorate global growth or bridge widening disparities. governments must avoid overly restrictive fiscal policies and instead focus on mobilizing investments in clean energy, infrastructure, and critical social sectors,” the report states.
As the global economy navigates these challenges, the UN’s findings underscore the need for coordinated efforts to ensure sustainable and inclusive growth in the years ahead.
Global Economic Growth in 2025: Insights from UN Report on Regional Trends, Inflation, and Debt Challenges
The global economy is set to grow at a modest 2.8% in 2025, unchanged from 2024, according to the United Nations World Economic Situation and Prospects 2025 report. while falling inflation and monetary easing offer some relief, challenges such as geopolitical tensions, rising debt, and uneven growth across regions persist. To unpack these findings, we spoke with Dr. Elena Martinez, a leading economist specializing in global growth and enduring growth, about the report’s key takeaways and what they mean for the future of the global economy.
Regional Growth Outlook: Diverging Trends across the globe
Senior Editor: Dr. Martinez, the UN report highlights notable regional variations in economic growth. Could you break down the key trends for our readers?
Dr. Martinez: Absolutely. The report shows a mixed picture. In the United States,growth is expected to moderate from 2.8% in 2024 to 1.9% in 2025,primarily due to softening labor markets and slower consumer spending. Europe, on the other hand, is forecast to recover modestly, with GDP growth rising from 0.9% in 2024 to 1.3% in 2025, supported by easing inflation and resilient labor markets. However, long-term challenges like weak productivity growth and an aging population continue to weigh on the region’s outlook.
In East Asia, growth is projected at 4.7% in 2025, driven by China’s stable expansion of 4.8% and robust private consumption across the region. South Asia remains the fastest-growing region, with GDP growth projected at 5.7% in 2025, led by India’s impressive 6.6% expansion. Africa is expected to grow modestly from 3.4% in 2024 to 3.7% in 2025, thanks to recoveries in major economies like Egypt, Nigeria, and South Africa.
Inflation and Debt: Persistent Challenges for Developing Economies
Senior Editor: the report also discusses inflation and debt as major concerns, particularly for developing countries.What are the key takeaways here?
Dr. Martinez: Global inflation is projected to decline from 4% in 2024 to 3.4% in 2025, wich is good news for households and businesses.Major central banks are expected to cut interest rates further as inflationary pressures ease. However, inflation in many developing countries is expected to remain above recent averages, with one in five projected to face double-digit levels in 2025.
Food inflation remains a critical concern, with nearly half of developing countries experiencing rates above 5% in 2024. This has deepened food insecurity in low-income countries, exacerbating existing vulnerabilities. Additionally, while easing global financial conditions could help reduce borrowing costs, access to capital remains uneven. Many low-income countries continue to grapple with high debt-servicing burdens and limited access to international financing,which hampers their ability to invest in critical areas like health,education,and infrastructure.
Calls for Bold Action: Investing in Sustainable Development
Senior Editor: The report emphasizes the need for bold action to address these challenges. What specific measures does it recommend?
Dr. Martinez: The report calls for governments to seize fiscal opportunities created by monetary easing to prioritize investments in sustainable development. This includes critical social sectors like health and education, and also clean energy and infrastructure. It also highlights the need for bold multilateral action to address interconnected crises such as debt, inequality, and climate change.
Monetary easing alone won’t be enough to reinvigorate global growth or bridge widening disparities. Governments must avoid overly restrictive fiscal policies and rather focus on mobilizing investments in areas that can drive long-term, inclusive growth. This is particularly critically important for low-income and vulnerable countries, where fragile growth threatens progress toward the Sustainable Development Goals (SDGs).
Looking Ahead: A Call for Coordinated Efforts
Senior Editor: what’s your overall take on the report’s findings, and what should policymakers and global leaders prioritize moving forward?
dr. martinez: The report underscores the need for coordinated efforts to ensure sustainable and inclusive growth. While there are some positive signs,such as falling inflation and monetary easing,the global economy continues to face significant uncertainties. Policymakers must address structural challenges like weak productivity, aging populations, and climate change, while also ensuring that growth is equitable and benefits all segments of society.
In the short term, governments should focus on supporting vulnerable populations, particularly in low-income countries, by addressing food insecurity and high debt burdens. In the long term, investments in sustainable development and clean energy will be critical to building resilience and driving inclusive growth.The challenges are significant, but with bold and coordinated action, we can create a more sustainable and equitable global economy.
Senior Editor: Thank you, dr. Martinez, for your insights.It’s clear that while the road ahead is challenging, there are opportunities for meaningful progress if we act decisively.
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