A ramping up of trade tensions and continued uncertainty have put the global economy on a rocky trajectory, with growth expected to slow to 2.3% in 2025, according to the latest report from UN Trade and Development (UNCTAD).
In its Trade and development foresights 2025, published in mid-April, UNCTAD cautions that this slowdown represents "a shift towards a recessionary path".
"Subdued demand, trade policy shocks, financial turbulence and systemic uncertainty are intensifying pressures – especially for developing countries," the UN agency says.
UNCTAD is not alone in forecasting a challenging economic period. The International Monetary Fund's (IMF) latest World Economic Outlook predicts global growth will slump to 2.8% in 2025, with trade growth expected to decline to 1.7%.
A 22 April blog post from the IMF's economic counsellor and director of research, Pierre-Olivier Gourinchas, lays bare the seismic nature of the shifts currently taking place. "The global economic system under which most countries have operated for the last 80 years is being reset, ushering the world into a new era,” it says. “Existing rules are challenged while new ones are yet to emerge."
The tension and uncertainty surrounding global trade is likely to persist in the months ahead. Although US President Donald Trump has announced a 90-day pause on his plans for sweeping tariffs on economies large and small, a 10% "baseline" tariff still remains in place, while China has been slapped with an effective 145% levy on its goods. On 22 April Trump said this "would come down substantially, but it won’t be zero." For its part, China has hit US products with a 125% retaliatory tariff.
Getting trade back on track will require "strengthening regional and international policy coordination, and building on existing trade and economic links", UNCTAD says, warning of "the dangers of economic fragmentation and geoeconomic confrontation."
Whether its words will be heeded remains to be seen.