NEW YORK: Pakistan, a key part of the South Asian region, is expected to experience “moderate growth, stabilising after a period of economic contraction”, with its Gross Domestic Product (GDP) projected to expand by 2.3% in 2025, according to a United Nations report.
The report, titled ‘the UN World Economic Situation and Prospects 2025’, noted that declining inflation has allowed most of the South Asian region’s central banks to commence or continue monetary easing in 2025.
Meanwhile, governments in Pakistan, Bangladesh and Sri Lanka are expected to continue fiscal consolidation and economic reforms under iMF-supported programmes.
It said that the near-term outlook for South Asia is expected to remain robust, with growth projected at 5.7% in 2025 and 6.0% in 2026, “driven by strong performance in India as well as economic recovery in a few other economies”, including Bhutan, Nepal and Sri Lanka.
The report said the global economy is at a precarious juncture, marked by heightened trade tensions and elevated policy uncertainty. The recent surge in tariffs — driving the effective US tariff rate up steeply — threatens to raise production costs, disrupt global supply chains and amplify financial turbulence. Uncertainty over trade and economic policies, combined with a volatile geopolitical landscape, is prompting businesses to delay or scale back critical investment decisions. These developments are compounding existing challenges, including high debt levels and sluggish productivity growth, further undermining global growth prospects.
Global GDP growth is now forecast at just 2.4% in 2025, down from 2.9% in 2024 and 0.4 percentage points below the January 2025 projection.
Slower global growth, elevated inflationary pressures and weakening global trade — including a projected halving of trade growth from 3.3% in 2024 to 1.6% in 2025 — jeopardise progress toward the Sustainable Development Goals.
The slowdown is broad-based, affecting both developed and developing economies. Growth in the United States is projected to decelerate significantly, from 2.8% in 2024 to 1.6% in 2025, with higher tariffs and policy uncertainty expected to weigh on private investment and consumption. In the European Union, GDP growth is forecast at 1.0% in 2025, unchanged from 2024, amid weaker net exports and higher trade barriers.
China’s growth is expected to slow to 4.6% this year, reflecting subdued consumer sentiment, disruptions in export-oriented manufacturing and ongoing property sector challenges. Several other major developing economies, including Brazil, Mexico and South Africa, are also facing growth downgrades due to weakening trade, slowing investment and falling commodity prices. India, whose 2025 growth forecast has been revised downward to 6.3%, remains one of the fastest growing large economies. –Agencies
