The United Nations has projected that global economic growth will remain at 2.8% in 2025, maintaining the pace set in 2024. According to a report by Reuters, this trend is influenced by a deceleration in the world’s leading economies, the U.S. and China. The World Economic Situation and Prospects report outlines how modest recoveries in the EU, Japan, and Britain, as well as robust performances in India and Indonesia, are anticipated to provide supportive momentum.
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Despite these positive indicators, the report indicates that global growth expectations fall short of the pre-pandemic decade average of 3.2%. The slower pace is attributed to structural challenges such as weakened investment, sluggish productivity growth, high debt levels, and demographic pressures. The United States is projected to see its growth taper from 2.8% last year to 1.9% in 2025, affected by a cooling labor market and reduced consumer expenditure. Meanwhile, China is forecasted to experience a slight dip to 4.8% growth this year.
Europe is expected to see gradual improvement with growth rates rising from 0.9% in 2024 to 1.3% by 2025. This is likely to be buoyed by more stable inflation and robust labor markets. In contrast, South Asia remains a growth leader, with regional GDP predicted to climb by 5.7% in 2025. Notably, India is on course to expand by 6.6% in 2025, a performance underpinned by strong private consumption and investment.
The report suggests central banks may continue easing interest rates in 2025 as inflationary pressures ease, with global inflation expected to decrease from 4% in 2024 to 3.4% in 2025. However, it warns that monetary policies alone are insufficient to rejuvenate global growth or mitigate rising inequalities. There is a call for ambitious multilateral strategies to confront intertwined global crises, encompassing debt challenges, inequality, and climate change.