World Bank has cut its global growth forecast for 2025 to 2.3%, citing mounting trade tensions and policy uncertainty, with growth forecasts being cut in nearly 70% of economies across all regions and income groups.
According to the bank’s latest Global Economic Prospects report, this slowdown would mark the weakest non-recessionary global growth since 2008.
Indermit Gill, the World Bank Group’s Chief Economist, warned of deepening stagnation in the developing world, saying, “Outside of Asia, the developing world is becoming a development-free zone.”
Gill noted that growth in developing economies has declined steadily, from 6% annually in the 2000s to under 4% in the 2020s.
The World Bank’s report projects that growth will slow in nearly 60% of developing economies in 2025, averaging 3.8% before a modest rise to 3.9% in 2026 and 2027, which is more than a full percentage point below the average of the 2010s.
Additionally, per capita income growth in these economies is forecast at 2.9% in 2025, 1.1 percentage points below the 2000–2019 average.
The World Bank urged policymakers to mobilize domestic revenue, prioritize spending for the most vulnerable, and enhance fiscal management.
It also emphasized the need for global cooperation to support vulnerable economies through multilateral initiatives and targeted relief.
The report highlighted that resolving current trade disputes and halving tariffs could boost global growth by 0.2 percentage points over 2025 and 2026, offering a potential pathway to recovery.
