The global economy is projected to slow significantly in 2025, with growth expected to drop to just 2.3%, according to the United Nations Conference on Trade and Development (UNCTAD). In its newly released report, “Trade and Development Foresights 2025 – Under Pressure: Uncertainty Reshapes Global Economic Prospects”, UNCTAD warns that the world economy is on a recessionary trajectory, driven by intensifying trade tensions, persistent financial volatility, and growing uncertainty.
The report points to a sharp increase in global trade disputes and tariff measures that are disrupting supply chains and undermining predictability. UNCTAD describes trade policy uncertainty as reaching historic levels, leading to delayed investments and reduced hiring in both developed and developing countries. The outlook is particularly troubling for low-income and vulnerable economies, which are already contending with worsening external financial conditions, heavy debt burdens, and weakening domestic growth. UNCTAD describes this as a “perfect storm” that could derail development progress in many parts of the world.
Despite the grim forecast, the report identifies growing South-South trade and regional economic integration as areas of potential resilience. Trade among developing countries now represents about one-third of global trade, offering opportunities for economic cooperation and recovery beyond traditional markets. UNCTAD emphasizes that stronger regional ties could help many nations navigate the broader global downturn.
In light of these challenges, UNCTAD calls for urgent international policy coordination. It urges governments to engage in dialogue, bolster regional partnerships, and work collectively to stabilize the global economy. The report concludes that without coordinated action, the risks of stagnation could deepen, jeopardizing the development prospects of countries already on fragile footing.
