The 2025 Edition of the World Economic Situation and Prospects Report, released by the United Nations Trade and Development (UNCTAD), presents a detailed analysis of the global economic landscape amid ongoing challenges and opportunities. Here are the main highlights:

GLOBAL ECONOMIC RECOVERY

• The world economy has shown resilience through 2024, avoiding widespread contraction despite multiple shocks and sustained inflation-driven monetary tightening.
• Global economic growth is projected to stabilize at 2.8% for 2025 and 2.9% for 2026, consistent with the growth rate of 2.8% recorded in 2023 and estimated for 2024.

REGIONAL GROWTH DYNAMICS

• China and the United States are expected to experience positive but slower growth, while the European Union, Japan, and the United Kingdom will see modest recoveries.
• Notable robust performance is anticipated in large developing economies like India and Indonesia.
• However, low-income and vulnerable countries face a less favorable short-term outlook, with growth in Least Developed Countries (LDCs) projected to improve slightly but revised downward from earlier forecasts.

STRUCTURAL CHALLENGES

• The global economy is growing at a slower pace than the pre-pandemic average of 3.2%, reflecting ongoing structural issues such as:
  • Weak investment
  • Slow productivity growth
  • High debt levels
  • Demographic pressures
• Many developing countries continue to deal with the long-term effects of the pandemic and recent shocks.

INVESTMENT AND FINANCING HURDLES

• Despite potential growth from green transitions and technological advancements, benefits may be disproportionately concentrated in developed economies.
• Developing nations face significant challenges in mobilising financing for critical infrastructure, technology, and human capital investments.

RISKS TO ECONOMIC OUTLOOK

• Risks remain hooked to the downside but are less pronounced than in 2023 due to positive developments such as disinflation trends and monetary easing by major central banks.
• However, uncertainties persist, with indices measuring economic policy uncertainty and geopolitical risks remaining above historical averages.

CALL FOR ACTION

The report emphasizes the need for countries to deliver on commitments made in global agreements aimed at reforming financial architecture, increasing lending capacities of Multilateral Development Banks, and improving access to low-cost finance for sustainable development.

The 2025 World Economic Situation and Prospects report underscores a cautious yet hopeful outlook for global economic recovery, highlighting the importance of addressing structural challenges while fostering inclusive growth that benefits all nations.

Click here to read the full report………………….