Global economic growth to remain at 2.8% in 2025
A moderate boost to economic activity could come from lower inflation and monetary policy easing
In 2025, global economic growth will remain at 2.8%, unchanged from 2024. This is stated in the relevant UN report – World Economic Situation and Prospects 2025.
“Despite the fact that the global economy has demonstrated resilience, withstanding a series of mutually reinforcing shocks, growth remains below the pre-pandemic average of 3.2%, and is constrained by weak investment, slow productivity growth and high debt,” the report says.
As noted, declining inflation and monetary policy easing in many economies may provide a moderate boost to global economic activity in 2025. However, uncertainty is still considerable, and the risks associated with geopolitical conflicts, rising trade tensions, and higher borrowing costs in many parts of the world are high. These challenges are particularly acute for low-income and vulnerable countries.
The UN predicts that economic growth in the United States will slow from 2.8% in 2024 to 1.9% in 2025 due to a softening labor market and slower consumer spending.
Europe is expected to recover at a moderate pace. The region’s GDP growth will increase from 0.9% in 2024 to 1.3% in 2025, driven by lower inflation and resilient labor markets. At the same time, fiscal tightening and long-term challenges, such as low productivity growth and an aging population, continue to weigh on the economic outlook.
East Asia’s economy will grow by 4.7% this year, driven by China’s stable growth (4.8% y/y) and high private consumption.
South Asia will remain the fastest growing region in 2025 (forecast – 5.7% y/y). This growth will be led by India, whose GDP is expected to increase by 6.6% y/y this year.
The UN predicts that world trade will grow by 3.2% in 2025, slightly less than the 3.4% in 2024. However, tensions in trade policy and geopolitical uncertainty will continue to pose risks.
As GMK Center reported earlier, the Organization for Economic Cooperation and Development (OECD) has forecast global GDP growth of 3.2% y/y in 2024 and 2025, driven by steady trade growth, improved real incomes, and looser monetary policy in many economies.
