Global Economy Resilient Amid Conflict and Inflation, Growth Expected to Reach 2.8% in 2025
The world economy has demonstrated remarkable resilience in the face of various challenges, including conflicts and inflation, over the past year. According to a recent report by the United Nations, global economic growth is expected to reach a subdued 2.8% in 2025, driven primarily by strong performances from major economies such as China, the United States, India, and Indonesia.
Global Economic Outlook for 2025
The report, titled "World Economic Situation and Prospects 2025," highlights the positive trend in global economic growth despite various headwinds. The UN economists responsible for the report emphasized that their forecast is based on strong but slowing growth prospects for China and the United States, as well as robust performances anticipated for India and Indonesia.
The European Union, Japan, and the United Kingdom are expected to experience modest recovery, according to the report. However, the pace of growth is expected to be slow, reflecting the ongoing impact of global economic shocks and the prolonged period of monetary tightening.
Underlying Factors Driving Global Economic Growth
Several key factors are driving the anticipated growth in 2025. These include:
- Strong consumer and public-sector spending in the United States
- Robust performances from India and Indonesia, driven by solid private consumption and investment growth
- Modest recovery in the European Union, Japan, and the United Kingdom
However, the report also highlights several challenges that could impact global economic growth. These include:
- Lower consumption and property-sector weaknesses in China, which are forcing the government to enact policies to lift property markets, fight local government debt, and boost demand
- Shrinking population and rising trade and technology tensions in China, which could undermine medium-term growth prospects if left unaddressed
Regional Economic Performance
The report provides a detailed breakdown of regional economic performance. According to the UN economists, India is expected to drive a strong outlook for South Asia, with regional growth projected at 5.7% in 2025 and 6% in 2026.
India's 6.6% growth forecast for 2025 is backed by solid private consumption and investment growth, reflecting the country's ongoing structural transformation and economic expansion.
Poverty Reduction and Economic Growth
The report highlights the significant progress made in reducing poverty over the past three decades. The global reduction of poverty has been driven by strong economic performance, which has allowed countries such as China, India, and Indonesia to achieve unprecedented levels of poverty alleviation.
Conclusion
The world economy has demonstrated remarkable resilience in the face of various challenges over the past year. Despite ongoing headwinds, including conflicts and inflation, global economic growth is expected to reach a subdued 2.8% in 2025. The report highlights several key factors driving this anticipated growth, including strong performances from major economies such as China, the United States, India, and Indonesia.
However, the report also emphasizes several challenges that could impact global economic growth. These include lower consumption and property-sector weaknesses in China, shrinking population and rising trade and technology tensions in China, and ongoing monetary tightening.
The UN economists responsible for the report emphasize the importance of addressing these challenges to ensure continued global economic growth and poverty reduction.