UNCTAD: The global economy is heading towards stagnation with the escalation of commercial tensions

This came in a report issued by UNCTAD today, Wednesday, under the title “Trade and Development expectations for 2025 – under pressure: uncertainty reshapes global economic prospects.”

The report indicates increased threats, including commercial policy shocks, financial fluctuations, and the escalation of uncertainty, which may hinder global expectations.

The increasing trade tensions affect global trade, as UNCTAD indicated that recent tariff procedures disrupt supply chains and undermine prediction ability. The report indicates that “Uncertainty in commercial policies has reached the highest historical levels, and this is already translated into delay in investment decisions and a decrease in employment.”

UNCTAD said that the rise in global trade in late 2024 and early this year was partially driven by prior requests, and that this momentum is expected to fade, or until it is reflected, during the remaining period of 2025 with the entry of new customs duties into effect.

She emphasized that the uncertainty in commercial policies already affects companies and long -term planning decisions.

While the report stated that the slowdown will affect all countries, the UNCTAD has expressed special concern over developing countries, especially the most vulnerable economies. The report warned that many low -income countries are facing “Perfect Storm” From the deterioration of external financial conditions, unnecessary debts, and the weakness of local growth.

The report pointed to the growth of trade between developing countries – trade between the countries of the south – as a source of flexibility that provides protection against increased uncertainty. And while already represents about a third of global trade, he said “The capabilities of economic integration between the countries of the south provide opportunities for many developing countries.”

With the escalation of trade tensions and slowdown, UNCTAD warned of the dangers of economic fragmentation and geo-economic confrontation. The countries urged dialogue and negotiation, as well as enhancing policy coordination at the regional and global levels, by taking advantage of the existing commercial and economic ties. She said that coordinated work “It will be necessary to restore confidence and maintain the path of development.”