World Bank Cuts Global Growth Forecast Amid Trade Tensions and Inflation Worries


The World Bank has revised its global economic growth forecast for 2025, lowering it from 2.7% to 2.3%, marking one of the slowest projected expansions in recent decades. The downgrade reflects mounting pressure from persistent trade tensions, elevated tariffs, and geopolitical uncertainty.

According to the World Bank’s latest report, the global economy is entering a period of “prolonged fragility,” as both advanced and developing markets grapple with the aftereffects of inflationary shocks, high borrowing costs, and disrupted investment flows.

“The outlook remains clouded by uneven recovery, tight credit markets, and ongoing global trade fragmentation,” the report stated.

Emerging markets, which were previously expected to drive global growth, are now expected to face headwinds due to reduced foreign investment and declining export volumes. Meanwhile, advanced economies are dealing with sluggish consumer demand and productivity stagnation.

The report urged policymakers to focus on restoring investor confidence, improving supply chain resilience, and deepening regional cooperation to offset the risks of long-term stagnation.

This downward revision adds to growing concerns among global investors, especially amid the recent market volatility caused by escalating conflict in the Middle East and surging energy prices.

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