Sudden escalation of trade tensions sends shockwaves through global economy

Tariff-driven price pressures are adding to inflation risks, leaving trade-dependent economies particularly vulnerable.

Higher tariffs and shifting trade policies are threatening to disrupt global supply chains, raise production costs, and delay key investment decisions – all of this weakening the prospects for global growth.

General slowdown

The economic slowdown is widespread, affecting both developed and developing economies around the world, according to the report.

In the United States, growth is projected to slow “significantly”, said DESA, as higher tariffs and policy uncertainty are expected to weigh on private investment and consumer spending.

Several major developing economies, including Brazil and Mexico, are also experiencing downward revisions in their growth forecasts.

China’s economy is expected to grow by 4.6 per cent this year, down from 5.0 per cent in 2024. This slowdown reflects a weakening in consumer confidence, disruptions in export-driven manufacturing, and ongoing challenges in the Chinese property sector.

Inflation risks

By early 2025, inflation had exceeded pre-pandemic averages in two-thirds of countries worldwide, with more than 20 developing economies experiencing double-digit inflation rates.

This comes despite global headline inflation easing between 2023 and 2024.

Food inflation remained especially high in Africa, and in South and Western Asia, averaging above six per cent. This continues to hit low-income households hardest.

Rising trade barriers and climate-related shocks are further driving up inflation, highlighting the urgent need for coordinated policies to stabilise prices and protect the most vulnerable populations.

Developing economies

The tariff shock risks hitting vulnerable developing countries hard,” said Li Junhua, UN Under-Secretary-General for Economic and Social Affairs.

As central banks try to balance the need to control inflation with efforts to support weakening economies, many governments – particularly in developing countries – have limited fiscal space. This makes it more difficult for them to respond effectively to the economic slowdown.

For many developing countries, this challenging economic outlook threatens efforts to create jobs, reduce poverty, and tackle inequality, the report underlines.

Francoise picks out vegetables to resell to the Congolese traders at the Elakat market in the DRC.

Francoise picks out vegetables to resell to the Congolese traders at the Elakat market in the DRC.

 

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World News in Brief: Guterres on India-Pakistan tensions, eastern DR Congo update, weather boost for locusts in Africa

UN Secretary-General Guterres has spoken to leaders on both sides on India-Pakistan tensions.

“This morning, he spoke separately by telephone with Muhammad Shebaz Sharif, the Prime Minister of the Islamic Republic of Pakistan, and he also spoke earlier in the day with Subrahmanyam Jaishankar, the Minister for External Affairs of the Republic of India,” said UN Spokesperson Stéphane Dujarric, briefing journalists at UN Headquarters in New York.

During the calls the UN chief reiterated his strong condemnation of the 22 April terrorist attack, noting “the importance of pursuing justice and accountability for these attacks through lawful means.”

He expressed major concern over “rising tensions between India and Pakistan and he also underscored the need to avoid a confrontation that could result in tragic consequences,” added Mr. Dujarric.

The Secretary-General also offered to help mediate in support of any de-escalation efforts.

Escalating violence displaces thousands in eastern DR Congo

Ongoing violence in eastern Democratic Republic of the Congo (DRC) is uprooting families, crippling essential services, and placing civilians at growing risk, the UN humanitarian affairs office (OCHA) warned on Tuesday.

Fresh fighting in South Kivu province has forced communities to flee and left at least 10 civilians dead in Walungu territory alone, according to local authorities. “The violence is disrupting both economic life and the delivery of urgently needed humanitarian aid,” said OCHA.

Multiple rape cases

In nearby Kalehe, Minova hospital has reported multiple cases of rape and physical assault in recent days amid worsening insecurity. Meanwhile, clashes in Fizi territory last week led to health centres being looted and schools burned, threatening already fragile public services.

OCHA urged all combatants to respect international humanitarian law and ensure the protection of civilians. “Humanitarian access must be safe and unhindered,” the agency stressed.

The surge in displacement comes as eastern DRC remains gripped by fighting between the M23 rebel group and government forces, particularly in North Kivu. Since January, the violence has displaced hundreds of thousands.

In Walikale territory, civilians are trapped in a dangerous cycle of displacement and return, OCHA said, calling for strengthened protection and support for affected communities.

Locust swarms can devastate crops and pastures in many parts of Africa and elsewhere.

Favourable weather fuels desert locust surge in North Africa

Unusually high levels of desert locust infestations have been reported during the current breeding season, raising alarms across affected regions, the UN Food and Agriculture Organization (FAO) warned on Tuesday.

“Desert locusts remain among the most devastating migratory pests on the planet,” said UN Spokesperson Stéphane Dujarric, emphasising the threat they pose to food security and livelihoods.

A single swarm of locusts can cover anywhere from one to several hundred square kilometres and may contain up to 80 million adult locusts. In just 1 km², they can eat as much food in a day as 35,000 people.

Feeding on crops and pastureland, they pose a threat to crops grown for both people and livestock, risking starvation in communities that depend on agriculture for survival.

Clement weather for pests

According to the FAO, favourable weather conditions have created suitable breeding grounds for the flying pests. Winds and rainfall patterns have facilitated the movement of desert locusts from the Sahel to North Africa.

The FAO recommends conducting intensive ground surveys across key areas where locust breeding is likely to occur.

The area spanning from south of the Atlas Mountains in Morocco, through the Sahara in Algeria, and extending to southern Tunisia and western Libya is particularly at risk.

“Surveys and control operations are particularly urgent in locations where winter and early spring rains have created suitable breeding conditions,” said Cyril Piou, the FAO’s Locust Monitoring and Forecasting Officer.

Early detection and rapid response are critical to preventing a wider crisis, the UN food agency underscores.

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