Image: Shoeb Faruquee
Global economic growth is set to decelerate to just 2.3% in 2025, marking a recessionary trend fueled by mounting trade tensions, policy unpredictability, and deepening financial volatility, according to a new report by the United Nations Conference on Trade and Development (UNCTAD).
The “Trade and Development Foresights 2025 – Under pressure: Uncertainty reshapes global economic prospects” report warns that the international trade environment is deteriorating, with the highest levels of policy-related uncertainty seen in decades. UNCTAD urges stronger global policy coordination and regional trade integration to help counteract the pressure.
At Chattogram Port in Bangladesh, lorries line up beside stacks of multicolored containers, an image that captures both the potential and the vulnerability of developing economies navigating increasingly unstable trade waters.
Global growth slows, recession risks mount
UNCTAD’s projection of 2.3% global growth in 2025 places the world on a recessionary path. The organization cites rising protectionist policies, delays in investment decisions, and falling consumer and business confidence as core drivers of the downturn.
“Trade policy uncertainty is at a historical high,” the report says, noting that the ripple effect of tariffs, export restrictions, and shifting regulatory environments is creating a climate of hesitation across key sectors—including manufacturing, logistics, and maritime transport.
For the global shipping and project logistics industries, this means continued disruption to supply chains and cost planning. Route instability, fluctuating freight rates, and shifting customer demand are all becoming more difficult to predict.
Developing economies face a perfect storm
The slowdown will be felt worldwide, but UNCTAD emphasizes that developing countries—especially low-income and least developed economies—face the most severe consequences.
Many of these nations are already burdened with external financial pressures, unsustainable debt levels, and fragile domestic economies. This “perfect storm” threatens progress on infrastructure development, trade corridor connectivity, and long-term logistics investments.
In maritime hubs like Bangladesh, where breakbulk, project cargo, and general freight flows depend on regional stability and investment, these risks are particularly acute.
South–South trade offers a path forward
Despite the grim forecast, UNCTAD highlights one bright spot: the rise of South–South trade. Developing countries are trading more with each other than ever before, now accounting for roughly one-third of all global trade.
Intra-regional trade across Asia, Africa, and Latin America is growing, buoyed by improved port infrastructure, logistics corridors, and regional free trade agreements.
For instance, Bangladesh’s role in regional supply chains connecting India, Southeast Asia, and the Middle East is expanding. Enhanced coordination across customs, transport, and regulatory frameworks could amplify these benefits, offsetting some of the damage from global headwinds.
UNCTAD calls for targeted policy efforts to support regional economic integration, reduce trade frictions, and insulate vulnerable economies from external shocks. In the current climate, stronger cooperation may be the only anchor in increasingly choppy economic waters.
Source: UNCTAD
