Trump's "Tariff Big Stick" Deals a Heavy Blow to the Global Economy! UN: Growth Will Slow Down in Both This Year and Next Year

The United Nations forecast on Thursday that global economic growth would slow down this year and next, citing the impact of soaring US tariffs and escalating trade tensions.

"These days, the air is thick with uncertainty," said Shantanu Mukherjee, Director of the Economic Analysis and Policy Division in the UN Department of Economic and Social Affairs.

"This is a tense moment for the global economy.In January, we expected growth to remain stable, albeit below average, over the next two years, but since then, the outlook has darkened, accompanied by volatility across the board."He told reporters while releasing the mid-year forecast.

The UN economist pointed to turbulent geopolitical situations, rising production costs, supply chain disruptions, and the threat of financial instability.The UN now expects global economic growth to be 2.4% this year and 2.5% next year, down 0.4 percentage points each from the January forecast.Last year, the global economy grew by 2.9%.

Specific impacts

Mukherjee noted that the slowdown is affecting most countries and regions, butthe hardest hit are the poorest and least developed countries,whose growth prospects have fallen from 4.6% to 4.1% since January.

"This means billions of dollars in lost economic output for the most vulnerable countries, where more than half of the world's extreme poor live," he said.

Meanwhile, according to the UN report,the world's developed and developing countries are also expected to be affected.

The report said that the US economy is now expected to see a significant decline in growth, from 2.8% last year to 1.6% this year, noting that tariff hikes and policy uncertainty are expected to weigh on private investment and consumption.

In addition, the EU's economic growth is expected to remain flat with last year at just 1% this year, due to weak net exports and rising trade barriers. The UK's economic growth, which was 1.1% last year, is expected to fall to 0.9%.

The UN also expects that weak trade, slowing investment, and falling commodity prices will affect growth in other major developing economies, including Brazil, Mexico, and South Africa.

India will remain one of the world's fastest-growing major economies, but the UN forecasts that its growth rate is expected to decline from 7.1% in 2024 to 6.3% this year.

However, from a more positive perspective, Mukherjee said, the United Nations expects bilateral negotiations to lead to a reduction in tariffs, although he believes that tariffs will not return to the levels before US President Trump's announcement in February.

Nevertheless, Mukherjee believes that resolving uncertainties will also help individuals and businesses make economic decisions, which will have a positive impact on the global economy.