UN Forecasts Global Economic Growth at 2.8% for 2025 Amid Ongoing Challenges

As of January 10, 2025, the United Nations has released its latest report, titled World Economic Situation and Prospects 2025, forecasting that global economic growth will remain subdued at 2.8% for the year, unchanged from 2024.

This projection comes despite the resilience shown by the world economy in navigating challenges such as conflicts and inflation over the past year.

The UN’s optimistic outlook is primarily driven by steady, albeit slowing, growth anticipated in China and the United States, along with robust performances expected from India and Indonesia. Specifically, China’s economy is projected to grow by 4.8%, while the U.S. is expected to see a decline in growth from 2.8% in 2024 to 1.9% in 2025 due to a softening labor market and reduced consumer spending.

South Asia is expected to remain the fastest-growing region, with a projected GDP growth of 5.7%, led by India’s anticipated expansion of 6.6%.

East Asia, bolstered by China’s performance, is forecasted to grow by 4.7%.

Africa’s growth is set to rise modestly from 3.4% in 2024 to 3.7% in 2025, supported by recoveries in major economies like Egypt, Nigeria, and South Africa.

The European Union is projected to experience a modest recovery, with GDP growth increasing from 0.9% in 2024 to 1.3% in 2025.

Despite these positive indicators, the report highlights ongoing concerns such as weak investment, sluggish productivity growth, high debt levels, and geopolitical uncertainties that continue to cloud the economic outlook.

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

Shantanu Mukherjee, chief of the Global Economic Monitoring Branch at the UN’s Department of Economic and Social Affairs, noted that while the global economy shows signs of stability, it remains below pre-pandemic averages of 3.2% growth.

The UN’s report underscores a cautious optimism regarding global economic performance for 2025 while acknowledging significant risks that could impede progress.

As countries navigate these challenges, policymakers are urged to implement strategies that foster sustainable growth and address underlying structural issues affecting their economies.