- Report on the United Nations global economic situation and the 2025 prospects published.
- The United Nations report indicates that Pakistan should see moderate growth.
- Short -term prospects for South Asia should remain robust.
United Nations: Pakistan, a key element in the South Asian region, should experience “moderate growth, stabilizing after a period of economic contraction”, with its gross domestic product (GDP) planned to extend from 2.3% in 2025, according to a United Nations report.
The report, entitled “The United Nations world economic situation and the 2025 prospects”, noted that the drop in inflation has enabled most central banks in the South Asian region to start or continue monetary relaxation in 2025.
Meanwhile, the governments of Pakistan, Bangladesh and Sri Lanka should continue budgetary consolidation and economic reforms within the framework of programs adapted to the International Monetary Fund (IMF).
He said that short -term prospects for South Asia should remain robust, with growth expected at 5.7% in 2025 and 6.0% in 2026, “pulled by high performance in India as well as economic recovery in some other economies”, including Bhutan, Nepal and Sri Lanka.
The report indicates that the global economy is at a precarious moment, marked by increased trade tensions and high political uncertainty. The recent increase in prices – resulting in a high increase in the US rate rate in force – threatens to increase production costs, disrupt global supply chains and amplify financial turbulence.
Uncertainty about trade and economic policies, combined with a volatile geopolitical landscape, encourages companies to delay or reduce critical investment decisions. These developments aggravate existing challenges, including high debt levels and slow productivity growth, more soothing global growth prospects.
Global GDP growth is now planned at only 2.4% in 2025, compared to 2.9% in 2024 and 0.4 percentage point below the projection of January 2025.
Slower global growth, high inflationary pressures and a weakening of global trade – including a reduction of half projected of trade growth by 3.3% in 2024 to 1.6% in 2025 – compromised progress to sustainable development targets.
The slowdown is wide, affecting both the economies developed and developing. The United States’s growth is expected to deceive considerably, from 2.8% in 2024 to 1.6% in 2025, with higher political prices and uncertainty that should weigh on private investment and consumption. In the European Union, GDP growth is planned at 1.0% in 2025, unchanged compared to 2024, in the midst of lower net exports and higher commercial barriers.
China’s growth should slow down to 4.6% this year, reflecting the feeling of consumer moderation, disturbances in manufacturing and real estate sector challenges oriented towards export. Several other major developing economies, including Brazil, Mexico and South Africa, are also faced with downgrades due to the weakening of trade, slowdown in investments and the fall in prices for raw materials. India, whose growth forecasts in 2025 were revised downwards to 6.3%, remains one of the fastest major economies.
“The shock price is likely to hit vulnerable developing countries hard, slowing growth, reducing export income and composing debt challenges, especially since these economies are already having trouble making the investments necessary for long-term sustainable development,” said United Nations subsecretaries for economic and social affairs.
While overall inflation increased from 5.7% in 2023 to 4.0% in 2024, prices were stubbornly high in many savings. At the beginning of 2025, inflation exceeded pre-countryic averages in two thirds of the countries, with more than 20 development economies faced with two-digit rates.
Food inflation, on average greater than 6%, continues to hit households with lowest income, especially in Africa, South Asia and Western Asia. Higher trade barriers and climatic shocks more amplify the risks of inflation, highlighting the need for coordinated policies – combining credible monetary frameworks, targeted tax support and long -term strategies – to stabilize prices and protect the most vulnerable.
In many countries, the challenges of monetary policy have intensified in an uncertain economic environment. Central banks are struggling with difficult compromises between inflationary pressure management – exacerbated by price shocks induced by prices – and the slowdown in savings. At the same time, the limited budgetary space, in particular in developing economies, limits the capacity of governments to effectively alleviate economic slowdown.
The deterioration of global perspectives and geopolitical fragmentation undermines progress in development.
For many developing countries, this dark economic perspective undermines the prospects for job creation, poverty reduction and the fight against inequalities. For the least developed countries – where growth is expected to slow from 4.5% in 2024 to 4.1% in 2025 – the drop in export income, the tightening of financial conditions and the reduction in official development aid threatening to further erode budgetary space and increase the risk of debt distress.
The climbing of trade frictions contracts the multilateral trade system more, leaving small vulnerable economies increasingly marginalized in a fragmented global landscape.
Strengthening multilateral cooperation is essential to meet these challenges. Revitalize the rules based on rules and provide targeted support to vulnerable countries will be essential to promote sustainable and inclusive development.
The fourth international conference on development financing, which takes place in Seville, Spain, from June 30 to July 3, 2025, will be a crucial platform to solve problems such as the strengthening of multilateral cooperation, the sustainability of debt and even more to stimulate concrete actions on funding for sustainable development for all, added the report.
