The United Nations Department of Economic and Social Affairs (UN DESA) has warned that the global economy is teetering at a fragile turning point due to escalating trade tensions and heightened policy uncertainty.

In a report released on Thursday, UN DESA noted that tariff-driven price pressures are intensifying inflation risks, leaving trade-dependent economies particularly exposed.

The report highlighted that rising tariffs and evolving trade policies are disrupting global supply chains, increasing production costs, and delaying critical investment decisions — all of which are eroding prospects for sustained global growth.

“The economic slowdown is broad-based, affecting both advanced and developing economies,” the report stated.

In the United States, growth is projected to decelerate significantly, as trade barriers and policy ambiguity weigh on private investment and consumer spending. Similarly, major emerging economies such as Brazil and Mexico have seen downward revisions in their economic outlooks.

China’s growth is forecast at 4.6 per cent for 2025, down from 5.0 per cent in 2024. The slowdown is attributed to weakened consumer confidence, disruptions in export-oriented manufacturing, and continued stress in the property market.

By early 2025, inflation had surpassed pre-pandemic levels in two-thirds of countries, with over 20 developing nations grappling with double-digit inflation. This comes despite a general easing of global headline inflation between 2023 and 2024.

Food inflation remains particularly acute in Africa and South and Western Asia, where prices have averaged over six percent,  disproportionately impacting low-income households.

The report also underscored the compounded effects of rising trade barriers and climate-related shocks, both of which are exacerbating inflationary pressures and threatening economic stability.

“The urgent need for coordinated policy action is clear to stabilise prices, support global trade flows, and protect the world’s most vulnerable populations,” UN DESA concluded.