The projection is below the 2.5% threshold largely considered to signal a global recession.
It also represents a significant deceleration compared to average annual growth rates before the COVID 19 The pandemic when global growth was already moderate.
Threats and volatility
THE report City of montage threats, including commercial policy shocks, financial volatility and an increase in uncertainty.
The increase in trade tensions has an impact on world trade, and recent tariff measures disrupt supply chains and undergo predictability.
“” The uncertainty of commercial policy is at a historic summit“He said,”And this already results in delayed investment decisions and reduced hiring. “”
Each country affected
The slowdown will affect all nations and Trecta expressed continuous concern for developing countries, especially the most vulnerable economies.
Many low -income countries are faced with a “perfect storm” of worsening external financial conditions, unsustainable debt and weakening domestic growth, the agency said.
In terms of regional developments, UNCTAD expects a strong deceleration of the United States economy to a growth of 1% in 2025, largely due to increased political uncertainty composed by recently announced trade measures. Canada is also on the right track to find out a significant deceleration, with 0.7%growth forecasts.
“Overall, the risk of a recession later materializing this year in the North America region has increased considerably,” said the report.
Mixed images for Asia, Africa
The growth of the Southern Asia region will increase by 5.6% “because the inflation is decreasing the way to monetary releases in most of the region”. However, the volatility of food prices will remain a risk and the complexities around the debt will continue to affect savings such as Bangladesh, Pakistan and Sri Lanka.
Meanwhile, growth in Africa should take up to 3.6% this year, although its three largest economies – South Africa, Nigeria and Egypt, which represent almost half of the region’s economic production together – show a mixed image of recovery and challenges.
“Africa is on the front line of the exposure to cascade crises. Moderate growth through the continent is insufficient to create enough good jobs, especially for its young people, ”says the report.
South-South trade
The perspectives are not all dark because the report indicates the growth of trade between developing countries-known as the South-South trade-as a source of resilience.
It currently represents around a third of world trade and offers opportunities for many developing countries.
Faced with the increase in trade tensions and a slowdown in growth, UNCTAD calls for dialogue and negotiation alongside the coordination of stronger regional and global policies.
“The coordinated action will be essential to restore confidence and maintain development on the right track,” says the report.
Originally published at Almouwatin.com
