Global economy on recessionary path as trade tensions escalate: UNCTAD

Trade policy shocks, financial volatility, and rising uncertainty are threatening to derail the global economic outlook, said the report by UNCTAD titled ‘Trade and Development Foresights 2025—Under Pressure: Uncertainty Reshapes Global Economic Prospects’.

Rising trade tensions are affecting global trade, with UNCTAD highlighting the recent tariff actions disrupting supply chains and eroding predictability. The report pointed out that trade policy uncertainty has reached historic levels, leading to postponed investment decisions and slower hiring activity.

While the slowdown will impact all countries, UNCTAD expresses particular concern for developing and vulnerable economies. Many low-income nations are grappling with deteriorating financial conditions, unsustainable debt, and slowing domestic growth. It warns of serious risks to growth, investment, and development, but highlights South-South trade—already making up a third of global trade—as a key source of resilience and opportunity.

UNCTAD has urged dialogue and negotiation, alongside stronger regional and global policy coordination, building on existing trade and economic ties. Coordinated action will be essential to restore confidence and keep development on track, concluded the report.

Fibre2Fashion News Desk (SG)