The United Nations (UN) has forecast global economic growth to remain subdued in 2025, with a growth rate of just 2.8%. This projection reflects ongoing challenges in the global economy, including geopolitical instability, high inflation rates, and disruptions in global supply chains.
In its World Economic Situation and Prospects 2025 report, the UN stressed that while some regions—especially in Asia—could experience moderate economic expansion, growth in advanced economies, particularly in Europe and North America, is expected to be much slower. The report noted that developed countries are dealing with the lingering effects of the COVID-19 pandemic, increased interest rates, and inflationary pressures, which are collectively restraining their growth potential.
Emerging market economies face their own set of challenges, including rising levels of public and private debt, currency depreciation, and tightening global financial conditions.
Many of these countries rely heavily on exports and foreign investment, which remain vulnerable to global economic fluctuations.
The UN also pointed to specific challenges in industries such as textiles and garments. As inflation impacts consumer purchasing power, demand for non-essential goods—including fashion and luxury items—may see a slowdown.
This could affect manufacturers and retailers, particularly in developing economies where these industries play a key role in employment and exports.
In terms of regional outlook, Asia is expected to be the most dynamic area, driven by continued strong performance in China and India. However, the report indicated that even in this region, growth will be moderate compared to past years. In contrast, Europe is projected to experience near stagnation, with high inflation and energy costs continuing to affect its recovery, especially in the wake of the ongoing Russia-Ukraine conflict.
The UN’s report also highlighted that economic disparities between countries are likely to widen. Developed economies are expected to fare better due to their stronger financial resilience, while many developing nations may struggle with debt burdens and lower economic activity.
In light of these projections, the UN called for coordinated policy efforts across countries to foster economic resilience, address supply chain challenges, and ensure more equitable growth, particularly in emerging markets. It also stressed the importance of sustainability, urging nations to incorporate environmental and social considerations into their economic policies to pave the way for long-term stability.
