June 11, 2025｜Washington — The World Bank has released its latest "Global Economic Prospects" report, lowering the global growth forecast for 2025 to 2.3%. This marks a slowdown from 2.8% in 2024 and is more pessimistic than the January forecast of 2.7%.
While citing a "significant rise in trade barriers," the report strongly implies the Trump administration's protectionist trade policies, though it avoids naming them directly. It warns of increasing uncertainty in the global economy.
The United States, the world's largest economy, is projected to grow only 1.4% in 2025, down from 2.8% in 2024. This is a significant downgrade from the World Bank's January forecast of 2.3%.
The main reasons include the 10% tariff policy and other trade strategies implemented under Trump. These have led to rising costs, retaliatory actions, and disruptions not only to domestic industries but also to international trade flows.
The Chinese economy is also expected to slow from 5.0% in 2024 to 4.5% in 2025 and further to 4.0% in 2026. Contributing factors include tariffs imposed by the Trump administration, the collapse of the real estate bubble, and the progression of an aging society.
The Eurozone (20 countries) is also expected to experience a decline in growth from 0.9% in 2024 to 0.7% in 2025. Uncertainty around tariffs and sudden policy changes are dampening corporate investment incentives.
India remains the fastest-growing major economy, with projected growth of 6.3% in 2025. However, this is slightly downgraded from 6.5% in 2024 and the 6.7% projected in January.
In contrast, the Japanese economy is expected to accelerate from 0.2% in 2024 to 0.7% in 2025. However, it still falls short of the 1.2% forecast made in January by the World Bank. Stagnant domestic consumption and a declining population remain fundamental challenges.
In the preface of the report, Indermit Gill, Chief Economist at the World Bank, stated that “The world has missed the opportunity for a soft landing” and emphasized that “Without swift policy corrections, serious impacts on living standards cannot be avoided.”
The Organisation for Economic Co-operation and Development (OECD) also downgraded its growth outlook for both the U.S. and the global economy last week, fueling concerns over a worldwide slowdown.
The successive downgrades by the World Bank and OECD highlight that the global economy stands at a crossroads. The key to recovery lies in whether nations can move away from protectionism and implement cooperative policies.
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The World Bank has downgraded the global economic growth forecast for 2025 to 2.3%, revising downward the outlook for major economies including the United States, China, and the Eurozone.
Uncertainty from trade wars and tariff policies is having a serious impact on investment and growth.
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