Pakistan is expected to experience “moderate growth, stabilizing after a period of economic contraction”, with its Gross Domestic Product (GDP) that will be projected to expand by 2.3 percent in 2025, according to an important United Nations report.
The report, entitled ‘The world’s global economic situation and the 2025’ perspectives and published one day ago, said that the decrease in inflation has allowed most central banks in the southern region of South Asia to begin or continue monetary flexibility in 2025. Meanwhile, Pakistan, Bangladesh and Sri Lank International
He said that the short -term perspective for southern Asia was expected to remain robust, with a projected growth at 5.7pc in 2025 and 6pc in 2026, “promoted by strong performance in India and economic recovery in some other economies”, including Bután, Nepal and Sri Lanka.
The report says that the global economy was at a precarious situation, marked by increased commercial tensions and uncertainty of high policy. The recent increase in tariffs, promoting the effective rate of the United States, threaten to increase production costs, interrupt global supply chains and amplify financial turbulence.
Uncertainty about commercial and economic policies, combined with a volatile geopolitical panorama, is leading companies to delay or climb critical investment decisions. These developments aggravate the existing challenges, including high levels of debt and the slow growth of productivity, which further undermines the perspectives of global growth.
The global GDP growth is now forecast to only 2.4pc in 2025, below 2.9pc in 2024 and 0.4 percentage points below the January 2025 projection.
Most global growth, high inflationary pressures and weakening of global trade, including the reduction of half of the projected commercial growth from 3.3pc in 2024 to 1.6pc in 2025, endangers progress towards sustainable development objectives.
The deceleration is wide -based, which affects developed and developing economies. It is projected that growth in the United States will make it significantly, from 2.8pc in 2024 to 1.6pc in 2025, with higher rates and political uncertainty that is expected to evaluate private investment and consumption. In the European Union, GDP growth is forecast to 1 percent in 2025, without changes since 2024, in the midst of weaker net exports and greater commercial barriers.
China is expected to decrease to 4.6pc this year, reflecting the moderate feeling of the consumer, the interruptions in export -oriented manufacturing and the ongoing challenges of the real estate sector. Several other important developing economies, including Brazil, Mexico and South Africa, also face growth sales due to trade weakening, the slowdown in investment and the fall in the prices of basic products. India, whose growth forecast of 2025 has been reviewed down to 6.3pc, remains one of the most rapidly growing economies.
“Tarifa shock runs the risk of achieving hard developing countries, slowing down, reduce export income and aggravate debt challenges, especially because these economies are already struggling to make the necessary investments for sustainable long-term development,” said the United Nations Undersecretary-General Nations for economic and social matters LI Junhua.
While the global headline inflation decreased from 5.7pc by 2023 to 4pc in 2024, price pressures remain third in many economies. In early 2025, inflation exceeded pre-pandemic averages in two thirds of countries, with more than 20 developing economies that face two-digit rates.
Food inflation, averaging above 6 percent, continues to affect low -income houses, particularly in Africa, South Asia and Western Asia. The highest commercial barriers and climatic shocks are further amplifying the risks of inflation, underlining the need for coordinated policies that combine credible monetary frameworks, directed fiscal support and long -term strategies to stabilize prices and protect the most vulnerable.
In many countries, monetary policy challenges have intensified in an uncertain economic environment. The central banks are dealing with difficult compensation between the management of inflationary pressures exacerbated by the price clashes induced by the rate and support for deceleration economies. At the same time, the limited fiscal space, especially in developing economies, limits the ability of governments to effectively mitigate economic deceleration.
The deterioration of global perspectives and geopolitical fragmentation undermines development progress
For many developing countries, this gloomy economic perspective undermines the prospects for creating jobs, reducing poverty and addressing inequality. For less developed countries where growth is expected to decrease 4.5 percent by 2024 to 4.1PC in 2025, decreasing exports’ income, hardening of financial conditions and the reduction of official development assistance flows threaten to erosion further the fiscal space and increase the risk of anguish debt.
Increased commercial frictions are further struggling the multilateral trade system, leaving small and vulnerable economies increasingly marginalized in a fragmented global panorama.
Strengthening multilateral cooperation is essential to address these challenges. The revitalization of the commercial -based commercial system and providing support aimed at 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, will be a crucial platform to address issues such as strengthening multilateral cooperation, debt sustainability and more to boost concrete actions on financing for sustainable development for all, the report added.
