UN predicts world economic growth at subdued 2.8% in 2025

UNITED NATIONS (AP) — The world economy resisted battering by conflicts and inflation last year and is expected to grow a subdued 2.8% in 2025, the United Nations said Thursday.

In “World Economic Situation and Prospects 2025,” U.N. economists wrote that their positive prediction was driven by the strong although slowing growth forecast for China and the United States and by the robust performances anticipated for India and Indonesia. The European Union, Japan, and United Kingdom are expected to experience modest recovery, the report says.

“We are in a period of stable, subpar growth,” said Shantanu Mukherjee, chief of the Global Economic Monitoring Branch at the Economic Analysis and Policy Division at the U.N.’s Department of Economic and Social Affairs.

“This may sound a bit like what we were saying last year, but actually if you lift the hood and take a peek at the engine things are humming,” he said.

The report says the U.S. economy outperformed expectations last year thanks to consumer and public-sector spending, but growth is expected to slow from 2.8% to 1.9% this year.

The report points out that China sees its own strong growth slowing slightly from 4.9% in 2024 to 4.8% in 2025 due to lower consumption and property-sector weaknesses that are failing to make up for public investment and export strength. This is forcing the government to enact policies to lift property markets, fight local government debt and boost demand.

China’s “shrinking population and rising trade and technology tensions, if unaddressed, could undermine medium-term growth prospects,” the report reads.

The U.N. projected last January that 2024 global economic growth would be 2.4%. It said Thursday that the rate was estimated to have been higher, at 2.8%.

Both remain below the 3% rate that the world saw before the COVID-19 pandemic started in 2020.

European growth this year is projected to gradually pick up after a weaker than expected performance in 2024. Japan is poised to pick up from periods of near-recession and recession. 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, the report says.

“The global reduction of poverty over the past 30 years has been driven by strong economic performance. This has been especially true in Asia, where rapid economic growth and structural transformation have allowed countries such as China, India, and Indonesia to achieve poverty alleviation unprecedented in scale and scope,” the report says.

“The world economy has largely avoided a broad-based contraction despite the unprecedented shocks of the last few years and the most prolonged period of monetary tightening in history,” said Li Junhua, director, of the Economic Analysis and Policy Division at the Department of Economic and Social Affairs.

However, he cautioned, “the recovery remains driven primarily by a few large economies.”