Ah, the global economy—much like a grand old clock, it keeps ticking along albeit a tad sluggishly. Despite having been knocked about by inflationary pressures and those never-ending geopolitical kerfuffles, it’s expected to expand at a rather modest pace of 2.8% in 2025. So says the United Nations in their “World Economic Situation and Prospects 2025” report to be released this Thursday.
“We are in a period of stable, subpar growth,” declared Shantanu Mukherjee, the chap in charge of the Global Economic Monitoring Branch at the UN’s Department of Economic and Social Affairs. Remarkably, the wheels of the global economic mechanisms are still chugging along, even if not quite at pre-pandemic levels.
In a world where not all economic paths are created equal, the United States and China are noted for their steady performances. India and Indonesia bring a robust outlook to the table, and while Europe, Japan, and the UK show promise of a modest recovery, the global tapestry remains a mixed bag.
The report pays homage to the resilience of some of the major economies, yet doesn’t shy away from underlining vulnerabilities that remain. Over in Europe and Japan, a gentle recovery is on the cards after near-recessionary bouts in 2024. Europe’s growth is anticipated to inch up, and Japan may find its feet again after spells of stagnation.
Let’s take a closer look at some key players:
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United States: The US economy pleasantly surprised everyone in 2024 thanks to spirited consumer spending and plucky public-sector investment. However, the excitement is set to dwindle, with growth expected to decelerate from 2.8% in 2024 to 1.9% in 2025, as fiscal stimuli begin to fade.
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China: China’s economy, ranked as the world’s second-largest, is projected to see a slight slip from 4.9% in 2024 to 4.8% in 2025. Challenges such as property sector weaknesses and lower domestic consumption lurk around. The Chinese authorities are attempting to tackle local government debt and stimulate the property market, but technology tensions and dwindling population may present obstacles.
- India: India steadfastly leads with a foresaw growth rate of 6.6% in 2025, propelled by hearty private consumption and investment. This not only bolsters South Asian growth to 5.7% in 2025, but also aims for 6% in 2026, solidifying India’s role as a global economic powerhouse.
Casting an eye on the broader scenario, Li Junhua from the Economic Analysis and Policy Division highlights a remarkable three-decade run of poverty reduction driven mainly by Asia. Thanks to pacey economic growth and transformative reforms, several countries, notably China, India, and Indonesia, have achieved unprecedented poverty alleviation.
Despite the absence of a widespread economic collapse, this grand old world must still navigate uneven terrain. Recovery remains a patchy affair, highly dependent on the prowess of several economic behemoths. Although still shy of pre-pandemic vigour, the task falls to policymakers to engineer a more inclusive and sustainable economic journey.
Country/Region | 2024 Growth | 2025 Growth |
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The United States | 2.8% | 1.9% |
China | 4.9% | 4.8% |
India | 6.6% | 6.6% |
South Asia | – | 5.7% |
For further details on how these trends unfold, visit BBC Business for in-depth insights.