Breaking News: World Bank Slashes Global Growth Forecast to 2.3% by 2025
Washington, June 10, 2025 – The World Bank has announced a significant cut to its global growth forecast for 2025, projecting a mere 2.3% growth rate. This represents a 0.4% decrease from the 2.7% forecast issued in January, primarily due to escalating tariffs and commercial tensions.
Global Economic Perspectives: A Decade of Slow Growth
In its latest report, “World Economic Perspectives,” the World Bank reviewed its global growth outlook. The new estimate for 2025 is the slowest since the 2008 financial crisis, excluding recessions. The report highlights a deceleration from 2.8% in 2024 to 2.3% in 2025, with a projected growth of 2.4% in 2026 and 2.6% by 2028.
Impact on Advanced and Emerging Economies
Advanced economies are expected to grow by just 1.2% in 2025, according to the World Bank. This figure is set to rise to 1.4% in 2026 and 1.5% in 2027. Emerging economies, however, will maintain a stronger growth rate of 3.8% in 2025 and 2026, with projections reaching 3.9% by 2027.
The United States is projected to lead among advanced economies with a 1.4% growth rate in 2025, while the Eurozone is expected to grow at a slower pace of 0.7%. By 2027, the U.S. growth rate is projected to be 1.9%, compared to the Eurozone’s 1%.
China and Emerging Economies Face Decelerated Growth
Among emerging economies, China is expected to grow by 4.5% in 2025, down from 5% in 2024. The growth rate is projected to further slow to 4% in 2026 and 3.9% in 2027. Other emerging economies face similar challenges due to commercial tensions, with tariffs disproportionately affecting these regions.
Opportunities to Mitigate the Slowdown
The World Bank indicates that resolving commercial disputes and reducing tariffs could significantly boost global growth. Cutting tariffs in half could increase global growth by 0.2% in 2025 and 2026, decreasing normative uncertainty and financial volatility. Ayhan Kose, a chief economist at the World Bank, recommends that emerging markets seek new business partners and promote reforms to strengthen economic resilience.
Developing economies are advised to liberalize trade, establish strategic associations, and regional agreements to diversify markets and reduce dependence on conflict-ridden business partners. Prioritizing spending on vulnerable households and strengthening tax frameworks are also recommended to face growing development needs.
Long-Term Perspectives
The report projects a global growth rate of 2.6% by 2028, reflecting a gradual recovery after the slowdown in 2025. Advanced and emerging economies will rely on reforms to sustain growth amidst ongoing normative uncertainty. Diversification and strategic associations will be crucial for sustainable growth.
Proactive policies can mitigate risks, and countries prioritizing integration and fiscal resilience will better navigate current challenges. The World Bank emphasizes the importance of international cooperation to stabilize the global economy.
Stay tuned to archyde.com for the latest updates on global economic trends and expert insights. Join the conversation and share your thoughts on how to mitigate the economic slowdown.
