UN: Global economic growth to slow to 2.6% in 2025

Global economic growth will slow to 2.6% in 2025 amid rising financial volatility and geopolitical uncertainty, according to a new update by the United Nations Conference on Trade and Development (UNCTAD), Report informs.

Global economic growth will slow to 2.6% in 2025, down from 2.9% in 2024, as global trade and investment face increasing pressure from financial volatility and geopolitical uncertainty. Changes in financial markets have an almost as strong impact on global trade as real economic activity, reads the update.

Meanwhile, global trade grew by approximately 4% in early 2025, partly driven by faster imports in anticipation of tariff changes.

More than 90% of global trade relies on bank financing. Dollar liquidity and cross-border payment systems are also crucial to international trade activity. This deep dependence on financial channels makes trade closely linked to global financial and monetary conditions, UNCTAD notes.

For example, changes in interest rates or investor sentiment in a major financial center can affect trade volumes worldwide. In developing countries, where access to credit is limited, such financial pressures could undermine otherwise viable trade transactions, the UN warned.

However, developing economies are projected to grow by 4.3%, significantly outpacing the growth of developed economies.