UN expects global economic growth to stabilize at 2.8% in 2025

The United Nations expects global economic growth to stabilize at 2.8% in 2025, unchanged from last year, according to a new report.

The “positive but somewhat slower growth outlook for China and the United States” is supported by modest recoveries in the European Union, the United Kingdom and Japan, and strong performance in some large emerging economies, especially India and Indonesia, the report said.

It added: “Despite continued growth, the global economy is expected to grow at a slower pace than the 2010-2019 (pre-pandemic) average of 3.2%.”

The report, issued by the United Nations Department of Economic and Social Affairs, said: “This weak performance reflects the persistence of structural challenges such as weak investment, slow productivity growth, high debt levels and demographic pressures.”

As for the US economy, the report’s forecasts included a slowdown in growth to 1.9% this year compared to 2.8% last year, amid expectations of a weak labor market and slowdown in consumer spending.

As for China’s expectations, the report believes that the second largest economy in the world will record growth of about 4.8% in 2025 compared to 4.9% last year, in light of public sector investments and strong export performance, which comes despite expectations of weak growth in consumption and continued weakness in the real estate sector.

European economies are expected to recover modestly, with growth rising from 0.9% in 2024 to 1.3% this year “supported by low inflation and a strong labor market,” according to the report.

The UN report expects that major central banks will further reduce interest rates this year as inflationary pressures decline, expecting global inflation to decline to 3.4% this year compared to 4% in 2024.