UN report forecasts global economic growth at 2.8% in 2025, inflation to drop to 3.4%

It has projected a slight improvement in growth for least developed countries (LDCs) in 2025, slower global growth than the pre-pandemic average of 3.2%, and a fall in global inflation from 4% in 2024 to 3.4% in 2025, driven by easing labour market pressures in developed economies and moderating international food and energy commodity prices.

This forecast indicates positive but slower growth for China and the United States, which is expected to be complemented by modest recoveries in the European Union, Japan, United Kingdom, and strong performance in large developing economies like India and Indonesia.

While global inflation has eased, the pace of disinflation has slowed due to persistent prices in housing and other services sectors in developed economies, with the short-term outlook for many low-income and vulnerable countries described as less favourable.
The report estimates US GDP growth to moderate to 1.9% in 2025 and 2.1% in 2026, amid weaker labour market performance, modest income growth, and looming cuts in public spending, with stubborn core inflation likely to keep the Federal Reserve cautious and discourage rapid monetary easing.

GDP growth in the European Union is forecasted to rise from 0.9% in 2024 to 1.3% in 2025 and 1.5% in 2026. However, fiscal consolidation, geopolitical uncertainties, and structural challenges like population ageing and weak productivity growth may constrain expansion.

Japan is projected to experience continued economic recovery, with growth forecast to rise from -0.2% in 2024 to 1% in 2025 and 1.2% in 2026. Growth in CIS countries is expected to moderate to 2.5% in 2025, down from 4.2% in 2024, anticipating a slowdown in Russia.

Economic growth in China is forecasted to moderate from 4.9% in 2024 to 4.8% in 2025, partly offset by public sector investments and strong export performance, though consumption growth is expected to remain subdued.

Economic growth in Africa is projected to strengthen from an estimated 3.4% in 2024 to 3.7% in 2025 and 4% in 2026, driven by recovery in the region’s largest economies—Egypt, Nigeria, and South Africa.

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