World Bank warns: This decade faces the weakest global growth performance since the 1960s
Affected by trade conflicts and policy uncertainties, the World Bank on Tuesday lowered its global GDP growth forecast for 2025 from 2.7% to 2.3%, warning that the 2020s could become the weakest decade since the 1960s. In this forecast adjustment, 70% of countries saw their economic growth rates downgraded. Among them, the U.S. GDP is expected to grow only 1.4% in 2025, a downgrade of 0.9% from previous forecasts
The World Bank has lowered its forecast for global economic growth this year.
On Tuesday, June 10, the World Bank revised its global economic growth expectation for 2025 down from the 2.7% predicted in January this year to 2.3%, which means that this growth rate is only better than during the global financial crisis in 2009 and the economic recession caused by the COVID-19 pandemic in 2020 over the past 17 years.
The World Bank warned that the 2020s could become the worst decade since the "Apollo moon landing" due to trade tensions and policy uncertainties.
The World Bank also cautioned that the average global economic growth rate for the first seven years of this century is expected to be only 2.5%, the slowest average growth level since the 1960s.
70% of Countries Have Their Economic Growth Forecasts Downgraded
In its latest "Global Economic Outlook" report, the World Bank has downgraded growth expectations for nearly 70% of countries.
It is expected that nearly 60% of developing economies will face economic slowdowns this year, a downgrade of 0.3 percentage points from the January forecast.
The growth rate expectation for low-income countries is 5.3%, also a downgrade of 0.4 percentage points from previous forecasts.
The U.S. is expected to grow only 1.4% this year, a downgrade of 0.9 percentage points from the original forecast.
The growth rate expectations for the Eurozone and Japan are both 0.7%, downgraded by 0.3 and 0.5 percentage points, respectively.
The World Bank warned in the report:
"If trade restrictions escalate or policy uncertainties persist, economic growth may slow down and could lead to increased financial pressures."
Other risks include spillover effects from slowing growth in major economies, escalating conflicts, and extreme weather events.
Trade Wars Suppress Global Economy, People Suffer Deeply
Analysis indicates that after Trump returns to the White House this year, he is determined to intensify trade strikes. The Trump administration believes that free trade has weakened the U.S. manufacturing base and made the U.S. more vulnerable in terms of supply chains. However, the erratic U.S. tariffs have impacted the market, leading to stagnation in investment and disruption of supply chains.
Indermit Gill, Chief Economist of the World Bank, wrote in the report's preface:
"The world economy is once again in turmoil. If we do not change direction quickly, the living standards of the people may suffer severely."
"International discord, especially in trade, has undermined many policy consensus that helped reduce extreme poverty and expand prosperity globally after World War II."
The World Bank also pointed out that if trade tensions ease, and governments control debt while focusing on job creation, the global economic outlook will improve
