UN’s WESP 2025 Report Highlights Sluggish Global Growth, Persistent Risks, and Regional Economic Trends
New York [US], January 10: The United Nations has cautioned that global economic growth will remain subdued in 2025, citing ongoing uncertainties and challenges in its latest World Economic Situation and Prospects (WESP) 2025 report released on Thursday.
The report highlights that while the global economy has shown resilience against a series of interlinked shocks, growth continues to lag behind the pre-pandemic average of 3.2 per cent, constrained by weak investment, sluggish productivity, and high debt levels.
Key Projections and Trends
The global economy is projected to grow at 2.8 per cent in 2025, unchanged from 2024. Lower inflation and ongoing monetary easing in many economies are expected to provide a modest boost to global activity.
However, the report flags significant risks, including geopolitical conflicts, rising trade tensions, and elevated borrowing costs, which particularly impact low-income and vulnerable countries, further jeopardizing progress towards the Sustainable Development Goals (SDGs).
UN Secretary-General Antonio Guterres emphasized the importance of collective action:
“In our interconnected economy, shocks in one region affect prices globally. We must build on progress and deliver a prosperous, sustainable future for all by 2025.”
Regional Growth Outlook
- United States: Growth is expected to moderate from 2.8 per cent in 2024 to 1.9 per cent in 2025, driven by a softening labour market and slowing consumer spending.
- Europe: GDP growth is projected to recover modestly, increasing from 0.9 per cent in 2024 to 1.3 per cent in 2025, supported by easing inflation and resilient labour markets. Long-term challenges such as ageing populations and weak productivity remain.
- East Asia: The region is forecast to grow by 4.7 per cent in 2025, with China contributing 4.8 per cent growth due to robust private consumption.
- South Asia: The fastest-growing region globally, with GDP projected to expand by 5.7 per cent, led by India’s strong growth of 6.6 per cent.
- Africa: Growth is forecast to rise from 3.4 per cent in 2024 to 3.7 per cent in 2025, with recoveries in major economies like Egypt, Nigeria, and South Africa. However, challenges such as rising debt, conflicts, and climate change impacts persist.
Global Trade and Inflation
- Global Trade: Projected 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 remain significant risks.
- Inflation: Global inflation is expected to decline from 4 per cent in 2024 to 3.4 per cent in 2025, with central banks likely to cut interest rates further as inflationary pressures ease.
Despite this moderation, many developing countries will face above-average inflation, with one in five projected to experience double-digit inflation levels in 2025.
Conclusion
The UN’s WESP 2025 report underscores the urgent need for global cooperation to address economic uncertainties and ensure inclusive growth. As Guterres stated, “The world must unite to build a sustainable and equitable future for all.”
