The World Bank has lowered its global growth forecast for 2025 to 2.3%, warning that escalating trade tensions and policy uncertainty - particularly stemming from U.S. tariffs - pose major threats to global economic stability.
The World Bank sharply cut its global growth forecast for 2025 by 0.4 percentage point to 2.3%, highlighting rising tariffs and growing uncertainty as significant headwinds affecting almost all economies.
In its Global Economic Prospects report, the Bank revised down projections for nearly 70% of all countries - including the U.S., China, and most of Europe - as well as six emerging market regions. These downgrades come just months after the start of a new wave of trade policy shifts under U.S. President Donald Trump.
Since taking office, Trump has implemented a series of tariff hikes that have lifted the effective U.S. tariff rate from under 3% to the mid-teens - its highest in nearly 100 years. The moves have triggered reciprocal tariffs from key trading partners, most notably China.
While U.S. officials argue that increased investment and tax reforms will offset the impact, the World Bank joins other global institutions in issuing stark warnings. The report stops short of predicting a recession but notes that the projected growth would mark the weakest performance in a non-recession year since 2008.
By 2027, global GDP growth is expected to average just 2.5% - the slowest pace of any decade since the 1960s.
The World Bank also lowered its 2025 global trade growth forecast to 1.8%, down from 3.4% in 2024 and significantly below the 2000s average of 5.9%. This forecast excludes tariff increases postponed until July 9 to allow for further negotiations.
Global inflation is projected to reach 2.9% in 2025, remaining above pre-pandemic levels due to persistent tariffs and tight labor conditions.
The Bank cautioned that risks remain heavily skewed to the downside. A hypothetical 10-point increase in average U.S. tariffs - matched by proportional retaliation - could cut another 0.5 percentage point from global growth in 2025.
“An escalation in trade barriers could lead to a near-paralysis of global trade in the second half of this year,” the report warned, “accompanied by plummeting confidence, rising uncertainty, and financial market volatility.”
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Ukrainian President Volodymyr Zelenskyy has called on the United States to target Ramzan Kadyrov, the leader of Russia’s Chechnya region, with an operation similar to the recent U.S. action that captured Venezuelan President Nicolás Maduro.
U.S. President Donald Trump said he will stop defence contractors from paying dividends or buying back shares until weapons production speeds up, criticising the industry for delays and high costs.
U.S. Secretary of State Marco Rubio said he will meet Danish leaders next week, signalling that Washington is not retreating from President Donald Trump’s stated goal of acquiring Greenland, despite mounting concern among European allies.
Germany’s foreign intelligence service secretly monitored the telephone communications of former U.S. President Barack Obama for several years, including calls made aboard Air Force One, according to an investigation by the German newspaper Die Zeit.
Diplomatic tensions between Tokyo and Beijing escalated as Japan slams China's export ban on dual-use goods. Markets have wobbled as fears grow over a potential rare earth embargo affecting global supply chains.
Open-source intelligence (OSINT) sources reported a significant movement of U.S. military aircraft towards the Middle East in recent hours. Dozens of U.S. Air Force aerial refuelling tankers and heavy transport aircraft were observed heading eastwards, presumably to staging points in the region.
Iran’s chief justice has warned protesters there will be “no leniency for those who help the enemy against the Islamic Republic”, as rights groups reported a rising death toll during what observers describe as the country’s biggest wave of unrest in three years.
Two people have been killed after a private helicopter crashed at a recreation centre in Russia’s Perm region, Russian authorities and local media have said.
U.S. oil major Chevron and private equity firm Quantum Capital Group are reportedly preparing a joint bid to acquire Lukoil’s international assets, as the sanctioned Russian energy company seeks to divest its overseas operations.
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The U.S. dollar has strengthened against major peers on Tuesday, while the euro fell following slower-than-expected inflation in Europe. Market movements were relatively subdued as investors focused on upcoming U.S. economic data.
Wall Street closed higher on Tuesday, boosted by optimism over artificial intelligence (AI) and a strong rally in Moderna shares, with the Dow Jones Industrial Average approaching a record high.
India’s largest oil refiner, Indian Oil Corporation (IOC), has taken a significant step towards diversifying its crude oil supply by purchasing Colombian crude, from state oil company Ecopetrol, for the first time.
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