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