A recent report has warned that escalating tariffs and shifting trade policies are increasingly jeopardizing global supply chains, pushing up production costs, and stalling critical investment decisions. These factors collectively threaten to weaken global economic growth prospects.
The economic slowdown is broad-based, affecting both developed and developing nations. In the United States, growth is expected to decline significantly, with trade tensions and policy uncertainty projected to dampen private investment and consumer spending.
Major developing economies such as Brazil and Mexico are also facing reduced growth projections. In China, economic growth is forecasted to decelerate to 4.6% in 2025, down from 5.0% in 2024. This downturn is attributed to falling consumer confidence, export-related manufacturing disruptions, and persistent instability in the real estate sector.
By early 2025, inflation rates had surpassed pre-pandemic levels in nearly two-thirds of all countries. Over 20 developing nations are grappling with double-digit inflation. This trend persists despite a decline in global headline inflation between 2023 and 2024.
Food inflation remains particularly severe in Africa, as well as in South and Western Asia, where it averages above 6%. This is disproportionately affecting low-income households, worsening poverty and inequality.
The report also highlights how rising trade barriers and climate-induced shocks are further fueling inflationary pressures. These dynamics underscore the urgent need for coordinated global policies to stabilize prices and shield vulnerable populations from economic hardship.
UN Under-Secretary-General for Economic and Social Affairs, Li Junhua, emphasized the disproportionate impact of tariff shocks on fragile developing economies. He noted that many of these countries lack the fiscal capacity to effectively respond to the downturn, given constrained government budgets and limited financial resources.
The report concludes that this challenging economic environment poses significant obstacles for developing countries in their efforts to generate employment, alleviate poverty, and address social inequalities.
