UNITED NATIONS, May 16 (Alliance News): Pakistan’s economy is expected to witness moderate recovery with a projected GDP growth of 2.3% in 2025, following a period of economic contraction, according to the United Nations’ latest World Economic Situation and Prospects 2025 report released on Thursday.
The report highlights a stabilizing trend in South Asia’s economic landscape, noting that easing inflation has enabled central banks in the region to adopt monetary easing policies. Pakistan, along with Bangladesh and Sri Lanka, is also anticipated to maintain its course of fiscal consolidation and structural reforms under IMF-backed programs.
Overall, South Asia is projected to grow at 5.7% in 2025 and 6.0% in 2026, fueled by India’s strong performance and recoveries in Bhutan, Nepal, and Sri Lanka.
The global outlook, however, presents a mixed picture. The report warns of a precarious economic environment worldwide, driven by growing trade tensions, policy uncertainty, and geopolitical volatility. Global GDP is forecast to grow by only 2.4% in 2025—down from 2.9% in 2024 and 0.4 percentage points lower than the UN’s January projection.
Trade growth is also expected to halve, dropping from 3.3% in 2024 to just 1.6% in 2025, severely affecting both developed and developing economies.
The US is projected to see a significant slowdown, with growth falling from 2.8% in 2024 to 1.6% in 2025. China’s growth is expected to decline to 4.6%, while the EU will remain stagnant at 1.0%.
The report expresses concern that developing countries, particularly the least developed, may face heightened economic pressures, including high inflation, reduced export revenues, shrinking fiscal space, and increased risk of debt distress.
In Pakistan and other developing nations, food inflation remains a pressing concern, especially for low-income households. The report notes that global food inflation, averaging above 6%, continues to disproportionately impact vulnerable populations in Africa, South Asia, and Western Asia.
UN Under-Secretary-General for Economic and Social Affairs Li Junhua warned that “tariff shocks” and a fragmented global trade system could severely hurt developing economies, jeopardizing progress toward the Sustainable Development Goals.
The report calls for enhanced multilateral cooperation, targeted fiscal support, and long-term economic strategies to mitigate rising economic risks.
The upcoming Fourth International Conference on Financing for Development, scheduled for June 30 to July 3, 2025, in Sevilla, Spain, is expected to be a key forum to discuss these global challenges.
