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World Bank Cuts Global Economic Projection To 2.3 Percent In 2025

The World Bank has cut its projection for global economic growth in 2025 by 2.3 percent. 

In January, the World Bank predicted that the global economy could grow by 2.7 percent this year. 

The projection cut was made taking into account the implementation of higher United States (US) tariffs, as well as increasing uncertainty as a result of that policy. 

In January, the World Bank predicted that the global economy could grow by 2.7 percent this year. 

The projection cut was made taking into account the implementation of higher United States (US) tariffs, as well as increasing uncertainty as a result of that policy. 

In its Global Economic Prospects report released Tuesday (10/6), the World Bank lowered its forecast for nearly 70 percent of countries, including the US, China and Europe. 

World Bank analysts believe that higher tariffs and increasing uncertainty pose significant economic barriers for all countries. That would be the slowest growth rate outside of a major recession since 2008. 

The World Bank also said this decade is likely to be the weakest since the 1960s. 

Decades of economic progress in developing countries have stalled in recent years, with investment and trade growth slowing and debt mounting, the World Bank chief economist Indermit Gill said. 

"Outside Asia, developing countries are becoming a development free zone," he said. 

The World Bank said in the report that economic growth in developing countries has declined for three decades, from 6 percent a year in the 2000s, to 5 percent in the 2010s, to less than 4 percent in the 2020s. 

The World Bank urged governments to negotiate an end to the trade war tensions, and called on developing countries to rebuild their public finances by broadening their tax bases and implementing reforms in the hope of attracting investment. 

The World Bank's forecast assumes that the high reciprocal tariffs announced by Trump in April will not be reinstated. The bank said the situation could worsen further if tariffs are ultimately imposed higher than expected and uncertainty persists. 

"Risks to the global outlook remain tilted to the downside," it said. 

Since January, Trump has made a series of announcements imposing tariffs on nearly all of his trading partners, as well as higher levies on certain commodities such as steel. 

Tag: Asia Global Economic Prospects World Bank