World Bank Slashes 2025 Global Growth Forecast Amidst Trade Tensions

The World Bank has revised its economic prospects report, predicting a weaker global GDP growth of 2.3% in 2025, the lowest in 17 years outside of a global recession. This downward projection is attributed to trade tensions, including US President Donald Trump's wide-ranging tariffs, which have strained international relations and weighed on economic outlooks. The bank's chief economist, Indermit Gill, warns that without a swift course correction, the harm to living standards could be severe, and the world may not recover from the economic losses of the 2020s for two decades.

Key Takeaways:

• The World Bank has slashed its 2025 global growth forecast to 2.3%, a decrease from 2.7% expected in January, citing trade tensions and policy uncertainty.
• Global growth and inflation prospects for this year and next have worsened due to "high levels of policy uncertainty and this growing fragmentation of trade relations," according to Indermit Gill.
• The bank expects global GDP growth to average 2.5% in the 2020s, the slowest rate in any decade since the 1960s.
• The US economy is expected to grow by 1.4% this year, a sharp slowdown from a 2.8% expansion in 2024.
• If US tariffs on imports rise another 10 percentage points, it could cut world growth by 0.5 percentage points this year, according to the report.
• Commodity prices are expected to remain suppressed in 2025 and 2026, affecting 60% of emerging markets and developing economies.
• By 2027, developing economies may take two decades to recoup the economic losses of the 2020s, except for China.
• Inflation rates have been revised up, while GDP growth expectations have been downwardly revised.

Statistics:

• 2025 global GDP growth forecast: 2.3% (down from 2.7% in January)
• 2020s global GDP growth average: 2.5% (slowest rate in any decade since the 1960s)
• US GDP growth in 2024: 2.8%
• US GDP growth in 2025: 1.4%
• Potential cut to world growth if US tariffs rise: 0.5 percentage points
• Commodity export impact on emerging markets and developing economies: 60%
• Time to recoup economic losses of the 2020s: 2 decades (except for China)

Sources:

• World Bank Group's economic prospects report (exact source: not explicitly mentioned in the original text)
• World Bank Group chief economist Indermit Gill's statement
• AFP Copyright 2025 Alliance News Ltd. All Rights Reserved