World Bank forecasts decline in global economic growth

The World Bank says global economic growth will decline in 2025 due to increased trade barriers and policy uncertainty.

Growth is projected to weaken to 2.3 per cent, or nearly half a percentage point lower than expected at the start of the year, according to the Global Economic Prospects report released by World Bank on Tuesday, June 10, 2025.

World Bank stated: “The global outlook is predicated on tariff rates close to those of late May prevailing.

“Accordingly, pauses to previously announced tariff hikes between the United States and its trading partners are assumed to persist.”

Although a global recession is not expected, average global growth is on track to be the slowest of any decade since the 1960s.

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Growth forecasts are being slashed in nearly 70 per cent of all economies, with the poorest countries most affected.

In most developing countries, nearly 60 per cent, growth should average 3.8 per cent in 2025 before reaching an average 3.9 per cent in the following two years – more than a percentage lower than the average in the 2010s.

The slowdown will impact efforts by developing countries in areas such as job creation, poverty reduction and closing income gaps with richer economies.

Senior Vice President and Chief Economist Indermit Gill said: “The world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep.

“The report calls for rebuilding trade relations as “economic cooperation is better than any of the alternatives – for all parties.”

Countries are also urged to improve business climates and to promote employment by ensuring workers are equipped with necessary skills.

The Star