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Economic growth

Global Economic Growth Forecast Slashed to 2.3%

Strategic Insights

— 1 min read

The World Bank has revised its global economic growth forecast down to 2.3% for 2025, marking the slowest pace in 17 years. The forecast is impacted by global uncertainties, natural disasters, and trade-related disruptions. According to the World Bank's Global Economic Prospects report, this would be the slowest global economic growth rate since 2008, excluding the global recession.

Key Takeaways:

  • The World Bank has revised its global economic growth forecast down to 2.3% for 2025, the slowest pace in 17 years, since 2008.
  • The forecast is impacted by global uncertainties, natural disasters, and trade-related disruptions affecting emerging markets and developing economies (EMDEs), including Thailand.
  • The World Bank downgraded its 2025 growth forecast for the United States by 0.9% to 1.4%, and reduced the Eurozone's GDP forecast by 0.3% to 0.7%.
  • Rising trade tensions are cited as a major reason for the slowdown in economic growth.
  • However, the situation could improve if major economies reach long-term trade agreements, potentially strengthening global economic growth by 0.2% in 2025 and 2026.
  • The World Bank's analysis suggests that resolving ongoing trade disputes with agreements that halve current tariff levels by the end of May 2025 could lead to a strengthening of global economic growth.
  • The United States and its trading partners are in negotiations following President Donald Trump's decision to increase tariffs on imports from multiple countries in April.
  • The U.S. and China are scheduled to meet in London this week, with discussions between the European Union and the U.S. also ongoing, ahead of the expiration of the trade truce in less than a month.

Statistics:

  • Global economic growth forecast revised to 2.3% for 2025, the slowest pace in 17 years.
  • World Bank's previous forecast was 2.7%.
  • United States growth forecast reduced by 0.9% to 1.4% for 2025.
  • Eurozone's GDP forecast reduced by 0.3% to 0.7% for 2025.
  • Potential strengthening of global economic growth by 0.2% in 2025 and 2026 with trade agreements.

Sources:

  • CNBC report
  • World Bank's Global Economic Prospects report

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