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UN Predicts Global Growth to Hold Steady at 2.8% in 2025

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The UN forecasts that global economic growth will remain at 2.8% in 2025, consistent with the previous year. The World Economic Situation and Prospects report, released by the Department of Economic and Social Affairs, highlights recent reductions in inflation and monetary easing as potential boosts to global activity. However, uncertainties persist due to geopolitical conflicts, high borrowing costs, and trade tensions.Global economic growth is projected to remain at 2.8% in 2025, unchanged from 2024, with the top two economies, the U.S. and China, being seen as holding back this growth.

Regional Outlook

Growth in the U.S. is expected to slow to 1.9%, while the European Union may see a slight recovery to 1.3%. East Asia could experience a rebound to 4.7%, with South Asia leading at 5.7%, driven by India’s growth. Africa’s growth is projected to rise to 3.7%, and Latin America to 2.5%, despite challenges in Brazil.India, the largest economy in South Asia, is forecast to grow by 6.6% in 2025 and 6.8% in 2026, with this growth being driven by robust private consumption and investment.

Global inflation is expected to decline to 3.5% in 2025, though many developing countries will still face high inflation. The UN predicts further interest rate cuts from major central banks, potentially easing borrowing costs for less developed economies.The report emphasizes the need for sustainable development investments, urging governments to use any fiscal space to prioritize critical social sectors.The report highlights that many low-income countries are still grappling with high debt and challenges in accessing international financing. It suggests that any fiscal space created by monetary easing should be used by governments to prioritize sustainable development investments in critical social sectors.

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