The World Economic Situation and Prospects 2025 report by the United Nations forecasts global economic growth to stabilize at 2.8% this year, unchanged from the previous year. The report indicated that growth will remain slower than the pre-pandemic (2010-2019) average of 3.2%.
Regional Growth Outlook:
- United States: Growth is expected to slow from 2.8% in 2024 to 1.9% in 2025, due to a weak labor market and slowing consumer spending.
- China: The report estimated China’s economic growth at 4.9% in 2024, with a projected 4.8% in 2025, supported by public sector investments and strong export performance, despite weak consumption and ongoing real estate challenges.
- Europe: Europe is expected to recover modestly, with growth increasing from 0.9% in 2024 to 1.3% in 2025, supported by declining inflation and a strong labor market.
Structural Challenges:
The report highlighted that the global economy’s weak performance reflects persistent structural challenges, including:
- Weak investment.
- Slow productivity growth.
- High debt levels.
- Demographic pressures.
Inflation and Interest Rates:
Global inflation is expected to decline from 4% in 2024 to 3.4% in 2025. The report also predicted that major central banks would further cut interest rates in 2025 as inflationary pressures ease.