ISTANBUL

Amid recessionary trend linked to escalating trade tensions and uncertainty, global economic growth is expected to slow down to 2.3% in 2025, according to a statement by the UN Conference on Trade and Development (UNCTAD) on Wednesday.

"Developing economies face risks and worsening external conditions, but growing South-South trade and greater regional economic integration are opportunities," it said.

The statement highlighted mounting threats including trade policy shocks, financial volatility and a surge in uncertainty that risk derailing the global outlook.

"Trade policy uncertainty is at a historical high,” the report noted, “and this is already translating into delayed investment decisions and reduced hiring."

Even though the slowdown in growth will affect all nations, many low-income countries face a "perfect storm" of worsening external financial conditions, unsustainable debt and weakening domestic growth.

The report stressed the real threat to economic growth, investment, and development progress, particularly for the most vulnerable economies.

As trade tensions intensify, UNCTAD urged dialogue and negotiation, alongside stronger regional and global policy coordination, building on existing trade and economic ties.

“Coordinated action will be essential to restore confidence and keep development on track,” it added.