Global economic growth could slow to 2.3% this year, Unctad says
Global growth is projected to slow to 2.3% this year, placing the world economy on a recessionary path owing to mounting threats, including trade policy shocks, financial volatility and a surge in uncertainty, that risk derailing the global outlook, says the United Nations Trade and Development (Unctad) agency.
The world economy is on a recessionary trajectory, driven by escalating trade tensions and persistent uncertainty, it notes in its new 'Trade and Development Foresights 2025 - Under pressure: Uncertainty reshapes global economic prospects' report.
Rising trade tensions are impacting on global trade, with Unctad noting that recent tariff measures are disrupting supply chains and undermining predictability.
“Trade policy uncertainty is at a historical high and this is already translating into delayed investment decisions and reduced hiring,” it says in the report.
Further, the slowdown will affect all nations, but Unctad remains concerned about developing countries and especially the most vulnerable economies.
Many low-income countries face a perfect storm of worsening external financial conditions, unsustainable debt and weakening domestic growth, it states.
Unctad underlines the slowdown as a threat to economic growth, investment and development progress, particularly for the most vulnerable economies.
However, the agency points to the growth of trade among developing countries, or South-South trade, as a source of resilience.
Already accounting for about one-third of global trade, “the potential of South-South economic integration offers opportunities for many developing countries”, the report notes.
Meanwhile, Unctad urges dialogue and negotiation, alongside stronger regional and global policy coordination, building on existing trade and economic ties, and strengthened regional trade.
“Coordinated action will be essential to restore confidence and keep development on track,” the report concludes.
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