World Economic Situation and Prospects (WESP) report - Press Conference | United Nations

“It's been a nervous time for the global economy,” a Department of Economic and Social Affairs (DESA) Senior official said. At the launch the World Economic Situation and Prospects mid-year report today (16 May), Shantanu Mukherjee, Director, Economic Analysis and Policy Division of UN DESA said, “It's been a nervous time for the global economy. In January this year, we were expecting two years of stable growth, and since then, prospects have diminished, accompanied by significant volatility across various dimensions. So now we are forecasting global economic growth at 2.4 percent for 2025 and 2.5 percent for 2026. This is the downward revision of point four percentage points each year back from what we were expecting in January.” He also said, “This is not a recession, but the slowing down is affecting most countries and regions. Among the most severely hit are the least developed countries whose growth prospects for 2025 have fallen from 4.6 to 4.1 which is a drop by a full half percentage point in just a few months. Now, that translates into a loss of billions in economic output for the most disadvantage of countries.” He continued, “With this most recent shock, their five-year cumulative growth since 2021 is expected to be over 1/4 smaller than it would have been had they just grown at the rate they were averaging before the pandemic. Now, these are growth prospects are compounding the challenges they already face, such as fall in ODA, limited fiscal space and high levels of debt. And many developing countries are also still grappling with high levels of inflation, even though this is gradually moderating in some countries.” He added, “At this point, the average effective tariff rates for the US around 14 percent which is about six times higher than they were at the start of the year. And trade policy uncertainty is a factor in itself. It remains elevated, having surged to its highest value in the last 10 years, multiple times higher than the previous week.” He highlighted, “With merchandise trade representing just over a fifth the world output, and US and China together accounting for about a quarter of total imports., there's no surprise that these changes reverberated across the world, and going beyond just tariffs, volatility and some rather unexpected co movements have happened in a range of economic and financial indicators.” He said, “The uncertainty makes it even more likely that investment growth across the world, which was already slowing from 3.5 percent in 23 to 2.8 percent in 24 will continue to fall. And just to relate it to something we're all familiar with for small and medium enterprises, for example, difficulty in accessing capital when most needed can be fatal, with long term impacts for those whose livelihoods depend on them. Often, these are women.” He reported, “Across the world, fiscal deficits are now increasing for a variety of reasons. Developed countries and other major economies can finance these deficits quite affordably, but for many developing countries, the fiscal situation is becoming increasingly challenging.” He also said, “But our forecast from the beginning of the year indicated that overall, the global economy was reasonably healthy, and we recognize also that when assessed in comparison to other recent shocks, such as the global financial crisis, we have a downgrade, but it's not as extreme. In the forecast that we will present in greater detail today, we are expecting that bilateral negotiations will lead to lower tariff levels, although these will not return to pre-February levels. However, despite this, an early and complete resolution of uncertainties would help individuals and businesses move forward with economic decision making with positive results in 25 and even bigger impacts in 2026.”


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