UNITED NATIONS: Global economic growth is projected at 2.8 per cent in 2025, unchanged from the past year, with prospects in South Asia remaining “robust”, according to a UN flagship report.
“South Asia’s economic outlook remains robust, with regional GDP anticipated to grow by 5.7 per cent in 2025, compared to 5.9 per cent in 2024, supported by strong performance in India and recovery in Pakistan, Bhutan, Nepal and Sri Lanka,” the report produced by the UN Department of Economic and Social Affairs (DESA) said.
However, it warned that risks to the outlook are tilted to the downside owing to deceleration in external demand, ongoing debt challenges, and social un-rests.
“Additionally, strong export growth in services and certain manufactured goods will bolster economic activity,” the World Economic Situation and Prospects (WESP) 2025 report said.
“Looming risks ahead East and South Asia face mounting downside risks that could dampen economic prospects. Key risks and challenges include escalating geopolitical tensions, trade disputes, and the impact of climate change, which could reignite inflationary pressures and pose severe risks to food security.”
Replying to a question, Hamid Rashid, the Chief of Global Economic Monitoring Branch, Economic Analysis and Policy Division at DESA, said that once the debt issues of Pakistan and Sri Lanka are resolved, their economies are set to grow further.
In this regard, the report calls for bold multilateral action to address interconnected global crises, including debt, inequality and climate change.
Globally, the report the shows that despite withstanding a series of mutually reinforcing shocks, world economic growth has stagnated and remains below the pre-pandemic annual average of 3.2 per cent.
It highlights the enduring impact of weak investment, sluggish productivity, and high debt levels on global economic performance.
UN Secretary-General Antonio Guterres, in his foreword, called for decisive action to address these challenges.
“Countries cannot ignore these perils. In our interconnected economy, shocks on one side of the world push up prices on the other. Every country is affected and must be part of the solution,” he stated.
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The United States is expected to experience a slowdown in 2025 as labour markets soften and consumer spending settles down, the report projects.
