The global economy is at a delicate turning point, according to a new report by the United Nations Department of Economic and Social Affairs (UN DESA), which cites intensifying trade tensions and growing policy uncertainty as major concerns.
The report, released on Thursday, highlights that rising tariffs are fueling inflationary pressures, especially in economies reliant on global trade. These developments are disrupting supply chains, raising production costs, and deterring investment, all of which are dampening prospects for global growth.
Global Slowdown Worsens
Both advanced and developing economies are feeling the impact. In the United States, economic growth is expected to slow “significantly” due to trade-related uncertainties and reduced consumer spending. Brazil, Mexico, and other major developing nations have also seen downward revisions to their growth forecasts.
China’s growth is projected to fall to 4.6% in 2025, down from 5.0% in 2024, reflecting lower consumer confidence, export disruptions, and continued issues in the property sector.
Inflation Surges Worldwide
By early 2025, inflation rates had surpassed pre-pandemic levels in two-thirds of countries, with over 20 developing nations facing double-digit inflation. Despite some easing in global headline inflation between 2023 and 2024, food inflation remains high—particularly in Africa and parts of Asia—exceeding 6% and disproportionately affecting low-income households.
UN officials warn that rising trade barriers and climate-related shocks are exacerbating inflation, stressing the need for coordinated global policy responses.
Limited Fiscal Options
UN Under-Secretary-General for Economic and Social Affairs, Li Junhua, emphasized that “tariff shocks risk hitting vulnerable developing countries hard.” Many governments, especially in the developing world, face limited fiscal space, which constrains their ability to support their economies and respond to crises.
The report concludes that the current economic outlook threatens global efforts to reduce poverty, create jobs, and address inequality.
