Geneva, Switzerland – December 3, 2025 :
A new report from the UN Conference on Trade and Development (UNCTAD) has projected a broader global economic slowdown in 2025, warning that persistent geopolitical tensions, financial instability, and technological disruptions could push global growth down to 2.6%, compared to 2.9% in 2024.
Released around December 3, 2025, the report paints a sobering picture of rising international uncertainty. UNCTAD notes that the world economy is being strained by widening political fractures, the failure of global governance systems to respond to planetary challenges, and sharp volatility in cross-border trade and investment flows.
Geopolitical Tensions and Fragmentation Deepen Economic Risks
The report underscores that global instability — from regional conflicts to fractured trade alliances — continues to weigh on economic performance. Policymakers, it warns, have not adequately addressed climate pressures or the increasing polarization shaping global decision-making.
UNCTAD highlights the significant rise in global military expenditure as an indicator of worsening geopolitical stress. Arms sales by the world’s top 100 defense companies surged to $679 billion in 2024, reaching an all-time high and signaling further diversion of resources away from development priorities.
AI Job Risks Emerging in Asia
The report also draws attention to emerging labor market disruptions driven by rapid advances in artificial intelligence. UNCTAD warns that economies across Asia — particularly those reliant on large service-sector workforces — may face job displacement challenges if governments fail to strengthen digital safety nets and workforce upskilling programs.
India Faces Investor Outflows and Currency Pressure
India is among the major economies feeling the impact of global volatility. According to the report, foreign portfolio investors have pulled out more than $16 billion from Indian equities in recent months, driven by trade negotiation setbacks and weaker-than-expected corporate earnings.
The large sell-off has added pressure on the Indian rupee, contributing to its depreciation and increasing uncertainty in domestic markets.
Call for Coordinated Global Action
UNCTAD urges countries to adopt coordinated responses through global platforms such as the UN Environment Assembly, emphasizing that fragmented policymaking will only deepen economic vulnerabilities. The organization stresses the need for policy alignment on climate action, digital regulation, trade stability, and collaborative economic planning.
As nations prepare for a challenging year ahead, the report calls for renewed investment in sustainable development, stronger multilateral cooperation, and greater attention to emerging technological risks that could reshape the global economic landscape.
