New York

The United Nations has warned that global growth is expected to remain subdued in 2025 due to ongoing uncertainty, as outlined in its World Economic Situation and Prospects (WESP) 2025 report released on Thursday.

While the global economy has demonstrated resilience, withstanding a series of mutually reinforcing shocks, growth remains below the pre-pandemic average of 3.2 per cent, constrained by weak investment, sluggish productivity growth, and high debt levels, the UN report asserted.

As per the report, global economic growth is projected to remain at 2.8 per cent in 2025, unchanged from 2024.

The report noted that lower inflation and ongoing monetary easing in many economies could provide a modest boost to global economic activity in 2025.

However, uncertainty still looms large, with risks stemming from geopolitical conflicts, rising trade tensions and elevated borrowing costs in many parts of the world.

These challenges are particularly acute for low-income and vulnerable countries, where sub-par and fragile growth threatens to further undermine progress towards the Sustainable Development Goals (SDGs).

"Countries cannot ignore these perils. In our interconnected economy, shocks on one side of the world push up prices on the other. Every country is affected and must be part of the solution-- building on progress made," said Antonio Guterres, United Nations Secretary-General, in the foreword to the report.

"We've set a path. Now it's time to deliver. Together, let's make 2025 the year we put the world on track for a prosperous, sustainable future for all."

Growth in the United States is projected to moderate from 2.8 per cent in 2024 to 1.9 per cent in 2025, as the labour market softens, and consumer spending slows.

Europe is expected to recover modestly, with GDP growth increasing from 0.9 per cent in 2024 to 1.3 per cent in 2025, supported by easing inflation and resilient labour markets, though fiscal tightening and long-term challenges such as weak productivity growth and an ageing population, continue to weigh on the economic outlook.

East Asia is forecast to grow by 4.7 per cent in 2025--driven by China's projected stable growth of 4.8 per cent--supported by robust private consumption across the region.

South Asia is expected to remain the fastest-growing region, with GDP growth projected at 5.7 per cent in 2025, led by India's robust 6.6 per cent expansion.

Growth in Africa is forecast to rise modestly from 3.4 per cent in 2024 to 3.7 per cent in 2025, thanks to recoveries in major economies including Egypt, Nigeria, and South Africa. However, conflicts, rising debt-servicing costs, lack of employment opportunities and increasing severity of climate-change impacts weigh on Africa's outlook.

Further, the report asserted that global trade is expected to grow by 3.2 per cent in 2025, following a rebound of 3.4 per cent in 2024.

However, trade tensions, protectionist policies, and geopolitical uncertainties are significant risks to the outlook, it added.

Global inflation is projected to decline from 4 per cent in 2024 to 3.4 per cent in 2025, providing some relief to households and businesses.

Major central banks are expected to further cut interest rates in 2025 as inflationary pressures continue to ease.

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Although inflation is expected to moderate, many developing countries will still face inflation above historical averages, with one in five projected to experience double-digit inflation levels in 2025, the United Nations noted.