Trade and Development Foresights 2025

Current Context: The United Nations Conference on Trade and Development (UNCTAD) has released its report titled “Trade and Development Foresights 2025 – Under Pressure: Uncertainty Reshapes Global Economic Prospects”, highlighting significant challenges to global economic stability.​

Key Highlights:

• Global Growth Outlook: Projected to decelerate to 2.3% in 2025, down from 2.8% in 2024, indicating a shift toward recessionary conditions. ​
• Trade Dynamics: Late 2024 trade growth was driven by advance ordering before new tariffs; however, freight rates fell by 40% in early 2025, signaling a sharp decline in global trade activity. ​
• Policy Uncertainty: The Economic Policy Uncertainty Index reached its highest levels this century in early 2025, with concerns about shifting trade policies leading to financial turbulence. ​
• Development Finance Challenges: Official development assistance (ODA) is declining, with preliminary estimates suggesting an 18% drop from major donors between 2023 and 2025, jeopardizing progress towards the Sustainable Development Goals. ​
• Crisis for Developing Countries: Many developing countries face high debt, weak growth, and costly borrowing, with 35 out of 68 low-income countries in or near debt distress. ​
• South–South Trade: South–South trade now constitutes approximately one-third of global trade and is growing faster than the global average, especially within East and Southeast Asia.