Global Economic Growth Projections

UNITED NATIONS/NEW DELHI (Reuters) – Global economic growth is projected to remain at 2.8% in 2025, unchanged from 2024, largely impacted by the top two economies, the U.S. and China, according to a United Nations report released on Thursday.

The World Economic Situation and Prospects report noted that “positive but somewhat slower growth forecasts for China and the United States” will be offset by modest recovery in the European Union, Japan, and Britain, along with strong performance in developing economies like India and Indonesia.

Despite continuous growth, the global economy is expected to expand at a slower rate than the 2010–2019 (pre-pandemic) average of 3.2% due to ongoing challenges such as weak investment, slow productivity growth, high debt levels, and demographic pressures.

The report forecasts U.S. growth to decline from 2.8% last year to 1.9% in 2025 as the labor market softens and consumer spending decreases. In contrast, China is projected to grow by 4.9% in 2024 and 4.8% this year, with public sector investments and robust export performance balancing slow consumption growth and ongoing property sector weakness.

Europe is anticipated to experience modest recovery with growth increasing from 0.9% in 2024 to 1.3% in 2025, aided by easing inflation and stable labor markets.

South Asia is expected to remain the fastest-growing region globally, with GDP projected to rise by 5.7% in 2025 and 6% in 2026, bolstered by India’s strong performance and a recovery in Bhutan, Nepal, Pakistan, and Sri Lanka.

As the largest economy in South Asia, India is forecast to grow by 6.6% in 2025 and 6.8% in 2026, driven by strong private consumption and investment.

The report indicates that major central banks are likely to lower interest rates further in 2025 as inflationary pressures ease. Global inflation is projected to drop from 4% in 2024 to 3.4% in 2025, providing some relief for households and businesses.

It emphasizes the need for bold multilateral action to address interconnected crises, including debt, inequality, and climate change. “Monetary easing alone will not be sufficient to invigorate global growth or address widening disparities,” the report states.