The global economy is projected to grow at a rate of 2.8% in 2025, according to the latest United Nations report. This growth figure, consistent with 2024, indicates continued expansion, albeit at a slower pace than the pre-pandemic average of 3.2% observed between 2010 and 2019.
The UN’s World Economic Situation and Prospects report highlights key contributors and obstacles shaping this growth. Among the largest economies, the US and China are expected to lead with modest growth. The US is forecast to see a decrease in growth from 2.8% in 2024 to 1.9% in 2025, mainly due to a slowdown in consumer spending and a softened labor market. China’s growth is projected to be 4.8% in 2025, slightly below the previous year’s 4.9%, affected by weak consumption growth and a struggling property sector despite strong exports and public sector investment.
On the other hand, regions such as Europe are expected to show a moderate recovery. The European Union, Japan, and the UK are set for modest increases in growth, supported by resilient labor markets and easing inflation.
One of the most optimistic forecasts comes from South Asia, where the region is predicted to remain the world’s fastest-growing. India, in particular, is expected to expand at 6.6% in 2025, supported by private consumption and robust investment, making it a key driver of the region’s growth. Other nations like Indonesia, Sri Lanka, and Pakistan are also set for recoveries, which will contribute to the region’s collective growth.
The report underscores several challenges facing the global economy, including structural issues like high debt levels, slow productivity growth, and demographic pressures. These factors are limiting growth potential across various regions. While the global economy continues to grow, it is doing so at a slower pace due to these deep-rooted issues.
Another significant prediction from the UN report is a reduction in global inflation. Inflation is expected to decline from 4% in 2024 to 3.4% in 2025, which will offer some relief to both businesses and households. Major central banks are anticipated to continue reducing interest rates, contributing to the global economic ease.
To navigate these challenges and revitalize growth, the UN calls for bold, multilateral actions to address interconnected crises such as climate change, inequality, and rising debt levels. The report stresses that monetary easing alone is insufficient to reinvigorate the global economy or address the widening disparities within and between countries.