The World Bank has revised its forecast for the growth rate of the world economy in 2025, significantly reducing previous estimates. According to the updated data, the growth of world GDP next year is expected at the level of 2.3%, which is 0.4 percentage points lower compared to forecasts made six months ago. This is stated in the regular semi-annual report “Global Economic Prospects”.
The experts of the World Bank emphasize that the key factors that aggravated the slowdown were the increase in customs tariffs and the aggravation of global uncertainty. These processes create serious difficulties for the economic development of most countries of the world.
As recently as six months ago, analysts were cautiously talking about the global economy heading for a so-called “soft landing” scenario after a long period of upheavals – both natural and man-made crises – that have taken place over the past few years. However, these hopes did not come true. As noted in the report, the economy is once again facing a new wave of turbulence, and without timely corrective measures, this could seriously affect the world’s living standards.
Experts pay special attention to growing contradictions in international trade, which largely undermine the stability of the global economy and increase general unpredictability in various sectors.
In a new assessment, the World Bank lowered its forecasts for about 70% of the world’s economies. This list includes such key players as the United States, China, the countries of the European Union, as well as six major groups of emerging economies. The updated forecasts are more pessimistic compared to the estimates that were made six months ago — even before Donald Trump took office as the US president.
Despite the slowdown, the World Bank does not expect a global recession. At the same time, analysts emphasize that with the exception of recessionary periods, the current economic growth will be the weakest since 2008. The long-term outlook also remains extremely subdued, with average annual global GDP growth forecast for 2027 at 2.5%, the lowest for ten-year periods since the 1960s.
A separate section of the report is devoted to the state of international trade. Global trade is projected to grow by just 1.8% in 2025, down significantly from last year’s 3.4% and only about a third of the average growth rate of 5.9% recorded in the 2000s. This calculation was made on the basis of those tariff rates that were in effect as of the end of May this year. The calculations included, in particular, a 10 percent US tariff on the import of most goods from various countries. The forecast does not yet include additional tariff increases announced by US President Donald Trump in April, as they have been delayed until July 9 for further negotiations.
As for inflation, the World Bank expects that in 2025 its level in the world will be 2.9%. This is higher than the indicator recorded in the pre-pandemic period. The main factors of maintaining a high level of inflationary pressure, experts say, are the increase in customs duties, as well as the tense situation on the labor markets, where there is a labor shortage in certain sectors of the economy.
