Global Economy on Brink as Growth Slows, Modern Slavery Surges to 50 Million

A new report from the UN Trade and Development body (UNCTAD) released on Tuesday, December 2, 2025, paints a challenging picture for the global economy, projecting a slowdown in growth to 2.6% in 2025, a decrease from 2.9% in 2024. This deceleration is attributed to mounting pressures from financial market volatility and geopolitical uncertainty, according to Xinhua.

Developing economies are particularly vulnerable, facing increasing burdens from high borrowing costs, fluctuating financial markets, and escalating climate risks. These factors severely limit their capacity to invest in crucial infrastructure and sustain economic expansion, UNCTAD highlighted in its latest report.

The report also underscores a dire humanitarian crisis, revealing that global modern slavery has tragically risen to affect 50 million people. This alarming increase highlights the profound human cost intertwined with global instability, as noted by the UN.

This figure represents a significant increase of 10 million people in modern slavery since 2016, with women and children disproportionately affected, according to estimates by the International Labour Organization (ILO) and Walk Free.

UNCTAD Secretary-General Rebeca Grynspan emphasized that financial conditions increasingly dictate the direction of global trade, stating that trade involves not just suppliers but also credit lines, payment systems, currency markets, and capital flows, as reported by Reuters.

The convergence of a slowing global economy and a surging modern slavery crisis signals a period of heightened vulnerability, especially for the world's most marginalized populations. This dual challenge demands urgent and coordinated international action, according to the World Economic Forum.

• The UNCTAD's Trade and Development Report 2025 projects global economic growth to slow to 2.6% in both 2025 and 2026, falling below the pre-pandemic trend of 3%. This forecast, based on market exchange rate (MER) weights, contrasts with the OECD's prediction of 2.9% growth for 2026, which uses purchasing power parity (PPP) weights, as detailed by Dimsum Daily.
• Developing economies face significantly higher borrowing costs, often paying 7% to 11% for external loans, compared to 1% to 4% in major advanced economies, according to unctad. This disparity is exacerbated by climate vulnerability, with countries repeatedly exposed to extreme weather paying an estimated $20 billion more annually in interest, as reported by people's Daily Online.
• Financial markets now influence global trade almost as strongly as real economic activity, creating vulnerabilities for developing countries where currency volatility can make imports and debt repayments more expensive. UNCTAD Secretary-General Rebeca Grynspan told Reuters that more than 90% of global trade relies on bank financing, making it closely linked to global financial conditions.
• Modern slavery, encompassing forced labor and forced marriage, affected 50 million people in 2021, a figure that has risen by 10 million since 2016, according to the ILO, Walk Free, and IOM. These organizations collaborate to produce comprehensive global estimates, highlighting that forced labor alone generates $236 billion in illegal profits annually, as stated by the UN.
• The increase in modern slavery is compounded by global crises, including poverty, migration, weak governance, geopolitical conflicts, and climate change. The World Economic Forum reported that climate-related displacement alone affected over 23.7 million people in 2021, pushing many into exploitation and trafficking.
• The economic impact of modern slavery is substantial, with forced labor generating vast illegal profits and imposing significant costs on public services. Unseen UK estimates that in the UK alone, the total economic and social costs could amount to £60 billion annually, highlighting that modern slavery is both a human rights and an economic crime.
• Despite the UN's Sustainable Development Goal Target 8.7 to end modern slavery by 2030, global efforts are falling short due to rising risks and weak government enforcement. ActionAid International and the G20 Interfaith Forum note that many governments still rely on voluntary frameworks rather than enforcing laws to hold businesses accountable for exploitation in supply chains.
• UNCTAD has called for a series of reforms to mitigate financial vulnerability, enhance predictability, and better align trade, finance, and development policies. These recommendations include updating trade rules, reforming the international monetary system, and strengthening capital markets to expand affordable long-term finance for developing nations, as reported by people's Daily Online.