The global economy is projected to grow by as much as 2.3% in 2025, driven by multiple factors, including ongoing trade tensions and growing uncertainty surrounding U.S. tariff policy, the United Nations Conference on Trade and Development (UNCTAD) warned .
In its Trade and Development Outlook 2025 – Under Pressure: Uncertainty Reshaping the Global Economic Outlook report , the UN agency noted that the global economy is on a recessionary trajectory .
The document indicated that growing threats, financial volatility, and increased uncertainty could continue to weaken the global outlook.
In its report, it detailed that U.S. Gross Domestic Product (GDP) growth could slow by 1.8 points and fall to just 1% this year.
“Optimism at the beginning of 2025 about a potential dynamic expansion of the US economy, driven by corporate tax cuts, deregulation, and monetary easing, is now tempered by abrupt changes in trade and migration policies,” UNCTAD noted.
Meanwhile, in North America, the agency forecasts a slowdown of eight-tenths of a percentage point in Canadian economic growth, from 1.5% in 2024 to 0.7% in 2025. Meanwhile, China’s GDP could grow 4.4% this year.
The European Union ‘s economy is expected to grow by 1% in 2025, which would be a tenth of a percent more than last year.
UNCTAD emphasized that the slowdown will affect all countries, although developing and vulnerable economies could be more severely impacted.
“Many low-income countries are facing a ‘perfect storm’ of adverse external financial conditions, unsustainable debt, and weakening domestic growth,” the organization noted.
In Mexico’s case, the report indicated that export restrictions could affect productive growth. Regarding South-South trade, it specified that it represents approximately one-third of the global total.
“The potential of South-South economic integration offers opportunities for many developing countries,” the report stated, noting that tariffs are not the only reason for the global economic slowdown, as other factors also play a role, such as a lack of public policies.
Due to protectionist trade policies and the confrontation between China and the United States, cross-border production chains and trade flows could be disrupted, UNCTAD warned.
The report noted that the economic outlook for 2025 is not very encouraging, due to levels of political uncertainty that even exceed those experienced in 2020, during the onset of the COVID-19 pandemic.
Faced with these challenges, the United Nations agency called for the reactivation of dialogue and negotiation, along with greater coordination of regional and global policies, leveraging existing economic and trade ties.
On April 2 , US President Donald Trump announced a series of reciprocal tariffs that would be applied to products entering the United States from various countries around the world. However, on April 9 , the US president paused said tariffs for 90 days , except for China, a country with which the northern neighbor is engaged in a tariff dispute.
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