UN forecasts slower global economic growth following Trump's tariffs and
trade tensions
[May 16, 2025] By
EDITH M. LEDERER
UNITED NATIONS (AP) — The United Nations on Thursday forecast slower
global economic growth this year and next, pointing to the impact of the
surge in U.S. tariffs and increasing trade tensions.
U.N. economists also cited the volatile geopolitical landscape and
threats of rising production costs, supply chain disruptions and
financial turbulence.
“These days, there’s so much uncertainty in the air,” said Shantanu
Mukherjee, director of the Economic Analysis and Policy Division at the
U.N. Department of Economic and Social Affairs.
“It’s been a nervous time for the global economy,” he told reporters
while launching the midyear forecast. “In January this year, we were
expecting two years of stable — if subpar — growth, and since then,
prospects have diminished, accompanied by significant volatility across
various dimensions.”
The U.N. is now forecasting global economic growth of 2.4% this year and
2.5% next year — a drop of 0.4 percentage point each year from its
projections in January. Last year, the global economy grew 2.9%.
Mukherjee said the slowing is affecting most countries and regions, but
among the most severely hit are the poorest and least developed
countries, whose growth prospects have fallen from 4.6% to 4.1% just
since January.
“That translates into a loss of billions in economic output for the most
disadvantaged of countries,” which are home to over half the global
population living in extreme poverty, he said.
The world’s developed and developing countries also are projected to
suffer, according to the U.N. report.
Economic growth in the United States is now projected to drop
significantly, from 2.8% last year to 1.6% this year, it said, noting
that higher tariffs and policy uncertainty are expected to weigh on
private investment and consumption.
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Container cranes sit idle at the port of the port of New York & New
Jersey in Bayonne, N.J., Monday, May 12, 2025. (AP Photo/Matt Rourke)
 China’s growth is expected to slow
to 4.6% this year from 5% in 2024 as a result of subdued consumer
sentiment, disruptions in its export-oriented manufacturing
companies, and continuing challenges in its property sector, the
report said.
The European Union’s growth is forecast to remain the same this year
as it was last year — just 1%, the report said, citing weaker net
exports and higher trade barriers. The United Kingdom’s economic
growth of 1.1% last year is projected to fall to 0.9%.
Weakening trade, slowing investments and falling commodity prices
are also forecast to erode growth in other major developing
economies, including Brazil, Mexico and South Africa.
India will remain one of the world’s fastest-growing large
economies, but the U.N. forecast said its growth is expected to drop
from 7.1% in 2024 to 6.3% this year.
The U.N.’s global economic growth forecast is lower than the
International Monetary Fund’s.
On a more positive note, Mukherjee said the U.N. is expecting that
bilateral negotiations will lead to lower tariffs, although he said
they won’t return to the levels before U.S. President Donald Trump’s
February announcement.
Nonetheless, Mukherjee said, resolving uncertainties would help
individuals and businesses move forward with economic decisions and
that would have a positive impact on the global economy.
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