On May 16, the United Nations released its mid-year Global Economic Outlook Report, predicting a significant slowdown in global economic growth for 2024 and 2025. The report highlighted trade tensions, rising tariffs, and geopolitical uncertainties as major contributing factors.
Director of the Economic Analysis and Policy Division at the Department of Economic and Social Affairs, Shantanu Mukherjee, candidly stated at the press conference that “the air is filled with uncertainty,” and the global economy is facing “a very challenging moment.” Compared to forecasts in January, growth expectations have been broadly downgraded, reflecting the rapidly deteriorating macroeconomic environment over recent months.
According to the latest forecasts, global economic growth is projected to be 2.4% in 2024 and 2.5% in 2025, each revised down by 0.4 percentage points from previous forecasts. In comparison, the global economy grew by 2.9% in 2023.
Multiple Adverse Factors Suppress Global Growth
Mukherjee pointed out that a combination of factors is slowing down global economic expansion, including geopolitical conflicts, supply chain disruptions, rising energy and commodity costs, and turmoil in international financial markets. He especially emphasized that the poorest and least developed countries are hit the hardest, with their economic growth in 2024 expected to be revised down from 4.6% at the start of the year to 4.1%.
“This means these countries will face billions of dollars in lost economic output, with over half of the world's extremely poor population living in these areas,” Mukherjee noted.
Notable Slowdown in Growth in the US and Europe
On the national level, the report indicated that the US economic growth rate is expected to drop from last year's 2.8% to 1.6% in 2024. It noted that tariff hikes and policy uncertainties driven by the Trump administration are undermining private investment and consumer confidence, key factors in the slowdown of the US economy.
The European economy is similarly sluggish. The EU is expected to maintain a 1% growth rate, the same as last year, due to weak net exports and rising trade barriers. Meanwhile, the UK will see a decline from 1.1% in 2023 to 0.9%.
Emerging Economies Under Pressure, India Still Shines
Major developing economies have not been spared. The UN noted that countries like Brazil, Mexico, and South Africa face pressures from weakening exports and investments, with growth prospects trending downward.
India stands out as one of the few bright spots globally, although its growth rate will slow from 7.1% in 2024 to 6.3% this year, it remains the highest among major economies worldwide.
Hope for the Future, Potential Tariff Reductions
Despite the overall dim outlook, Mukherjee highlighted some positive factors. He pointed out that bilateral negotiations among some countries might lead to easing tariff pressures, though unlikely to return entirely to levels before President Trump announced tariff increases in February.
“If trade policies can become clearer, it will provide certainty for business and consumer decisions, which would benefit the global economy,” Mukherjee added.
The United Nations calls on governments worldwide to tackle the volatile and complex global economic environment by coordinating policies, enhancing international cooperation, and protecting the most vulnerable populations.
