The World Bank has lowered its global growth forecast for 2025 to 2.3%, down 0.4 percentage points from earlier estimates, warning that escalating trade tensions and tariff hikes are clouding the global economic outlook.
In its latest Global Economic Prospects report, the Bank cautioned that nearly 70% of economies, including U.S., China, and Europe, will experience weaker-than-expected growth. It attributed the downturn largely to President Donald Trump’s aggressive trade policies, which have pushed the U.S. tariff rate to its highest level in nearly 100 years and triggered retaliatory measures from trading partners.
Global Trade and Inflation Outlook
Global trade growth is expected to slow to 1.8% in 2025, down from 3.4% in 2024.
Inflation is forecast at 2.9% in 2025, still above pre-pandemic levels.
A further 10-point tariff hike and proportional retaliation could cost the global economy an additional 0.5% of growth, the Bank warned.
“Risks to the global outlook remain tilted decidedly to the downside,” the Bank said, citing the threat of a "global trade collapse" and "surging uncertainty".
Despite these concerns, the report stopped short of predicting a recession, pegging the risk of a global downturn at less than 10%.
Economic Forecasts by Region
U.S.: 2025 forecast slashed to 1.4%, down 0.9 points from January. 2026 outlook also lowered.
Eurozone: Forecast cut to 0.7% (-0.3 points).
Japan: Also down to 0.7% (-0.5 points).
Emerging markets: Expected to grow 3.8%, down from 4.1%.
China: Growth held at 4.5%, with the Bank citing Beijing’s capacity for policy support.
Mexico: Forecast sharply downgraded to 0.2%, due to reliance on U.S. trade.
White House Pushes Back
The White House disputed the World Bank’s assessment, pointing to strong domestic indicators. Spokesperson Kush Desai cited:
A 25% surge in business investment in Q1.
0.7% monthly growth in real disposable income in April.
Three consecutive strong jobs and inflation reports.
He said ongoing legislative efforts—including tax relief—would “turbo-charge America’s economic resurgence under President Trump.”
Outlook Beyond 2025
Global growth through 2027 is projected to average just 2.5%, the slowest for any decade since the 1960s.
Per capita GDP in developing countries (excluding China) is expected to remain 6% below pre-pandemic levels in 2027.
The Bank warned it could take two decades for poorer nations to recover from the economic blows of the 2020s.
Despite near-term turbulence, World Bank Deputy Chief Economist Ayhan Kose expressed cautious optimism, noting signs of increased trade dialogue and Artificial Intelligence-driven growth potential.
“Once the fog lifts, the trade engine may start running again, but at a slower pace,” Kose said.
Yemen’s Houthis have claimed responsibility for the recent drone and missile strikes on Saudi Aramco facilities in Dhahran and Riyadh and at ...
Ukraine's soldiers have had their access to Starlink satellite internet restricted. Kyiv's troops use the terminals, made by Elon Musk...
Azerbaijani President Ilham Aliyev and his Israeli counterpart, Isaac Herzog, met on 14 October to discuss bilateral ties and key regional and inte...
Yemen’s Houthis have claimed responsibility for the recent drone and missile strikes on Saudi Aramco facilities in Dhahran and Riyadh and at King Khalid International Airport in Saudi Arabia, vowing to carry out more attacks in the coming days.
The Saudi-led coalition in Yemen said late Monday that it intercepted and destroyed two ballistic missiles launched by the Houthi group toward Khamis Mushait in southwestern Saudi Arabia.
Thousands of young Georgians leave the country each year in search of better economic opportunities, with many moving west. As questions grow over Georgia’s European path, AnewZ spoke to people who have emigrated about what it would take for them to return.
Ukrainian President Volodymyr Zelenskyy says Russia hit at least six energy targets in deadly strikes across Ukraine, showing Moscow is unwilling to accept the energy ceasefire announced by U.S. President Donald Trump.
Ukraine's soldiers have had their access to Starlink satellite internet restricted. Kyiv's troops use the terminals, made by Elon Musk's SpaceX, to pilot drones. A source in Ukraine's Defence Ministry said the restrictions would make it harder for Kyiv's army to down Russian drones.
Ukraine's soldiers have had their access to Starlink satellite internet restricted. Kyiv's troops use the terminals, made by Elon Musk's SpaceX, to pilot drones. A source in Ukraine's Defence Ministry said the restrictions would make it harder for Kyiv's army to down Russian drones.
A 62-year-old man died on Wednesday after floodwaters swept his car into the sea on the Greek island of Rhodes, as torrential rain flooded roads, stranded vehicles and disrupted transport across the island.
A failure by the U.S. and Iran to reach an agreement on a UN-backed fertiliser shipping plan for the Strait of Hormuz within weeks could trigger a food security crisis in parts of Asia and Africa, a senior UN official has warned.
Pope Leo has been diagnosed with lung adenocarcinoma, the most common type of lung cancer, after surgeons removed the lower lobe of his right lung. The Vatican says the tumour was detected during a routine health check, but its stage and whether it has spread remain unknown.
Greek students braved heavy rain to pitch tents outside parliament in Athens on Tuesday, demanding affordable housing and more education funding as rising living costs put university places beyond the reach of some students.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment