Global economic growth is expected to remain stable

The United Nations predicts that global economic growth will remain at 2.8% in 2025, maintaining the growth rate set in 2024. According to Reuters, this trend is affected by the economic slowdown in the world’s major economies, the United States and China. The World Economic Situation and Prospects report outlines how modest recoveries in the European Union, Japan and the United Kingdom, as well as strong performance in India and Indonesia, are expected to provide supporting momentum.

Also read: Global economy stabilizes but faces slow growth and ongoing challenges

Despite these positive indicators, the report noted that global growth expectations remain below the pre-pandemic decade average of 3.2%. The slowdown is due to structural challenges such as weak investment, slow productivity growth, high debt levels and demographic pressures. Affected by a cooling labor market and reduced consumer spending, U.S. economic growth is expected to slow to 1.9% in 2025 from 2.8% last year. At the same time, China’s economic growth rate is expected to decline slightly to 4.8% this year.

Europe is expected to gradually improve, with growth rising from 0.9% in 2024 to 1.3% in 2025. This is likely to be boosted by more stable inflation and a strong labor market. In contrast, South Asia remains the growth leader, with GDP expected to grow by 5.7% in 2025. Notably, India’s economic growth will expand by 6.6% in 2025, a performance driven by strong private consumption and investment.

The report suggests that as inflationary pressure eases, central banks may continue to loosen interest rates in 2025, and the global inflation rate is expected to drop from 4% in 2024 to 3.4% in 2025. However, the report warned that monetary policy alone will not be enough to revive global growth or ease global inflationary pressures. Inequality has increased. There are calls for an ambitious multilateral strategy to address intertwined global crises, including debt challenges, inequality and climate change.

Source: IndexBox Market Intelligence Platform