The United Nations released a report on Thursday forecasting global economic growth to remain stagnant at 2.8% both in 2024 and 2025, with the world’s two leading economies, the U.S. and China, continuing to exert a drag on this rate.
The report, titled “World Economic Situation and Prospects,” anticipates moderate growth for the global economy, expecting it to be slower than the pre-pandemic average of 3.2% observed from 2010 to 2019.
Economic growth in the U.S. is expected to slow from 2.8% in 2024 to 1.9% in 2025 due to a cooling labor market and reduced consumer spending.
Meanwhile, China’s growth estimate stands at 4.8% for 2025, slightly down from 4.9% in 2024, as public investments and strong exports are dampened by weak consumption and property market challenges.
The report anticipates modest recoveries in Europe, Japan, and Britain, while large developing economies like India and Indonesia are expected to perform robustly.
Europe is predicted to see gradual improvement with growth rising from 0.9% in 2024 to 1.3% in 2025, benefiting from decreasing inflation and stable labor markets.
South Asia will maintain its status as the world’s fastest-growing region, with GDP expansion projected at 5.7% for 2025 and 6% in 2026, driven by strong performances in India and economic revitalization in neighboring countries like Bhutan and Nepal.
India, poised as the largest economy in South Asia, is expected to grow by 6.6% in 2025 and 6.8% in 2026, propelled by solid private consumption and investment.
As inflation pressures ease, major central banks are anticipated to lower interest rates further this year, with global inflation expected to fall from 4% in 2024 to 3.4% in 2025.
However, the report warns that monetary easing alone will not suffice to rejuvenate global growth or address increasing disparities, calling for concerted multilateral efforts to tackle intertwined challenges such as debt, inequality, and climate change.
