The cargo transport container has a crane mounted on a container ship at the Bruchardkay Container Terminal in the port of Hamburg in northern Germany on June 3, 2025.
Fabian Bimer | AFP | Getty Images
The World Bank on Tuesday sharply cut its forecasts of global economic growth, citing disruptions, particularly from trade uncertainty.
Currently, the global economy is expected to expand by 2.3% in 2025, up from its previous forecast of 2.7%.
“This will mark the slowest global growth rate since 2008, with the exception of a global recession,” the bank said in its Global Economic Outlook report.
In particular, trade uncertainty is heavy on the outlook, the World Bank suggested.
“In particular, international discrepancies about trade have overturned many of the certainties of policies that will help reduce extreme poverty and expand prosperity since the end of World War II,” Indolit Gill, senior vice president and chief economist at World Bank Group, said in the report.
It also reduced its US growth forecast for 2025 by 0.9% points to 1.4%, and it reduced its Eurozone GDP forecast by 0.3% points to 0.7%.
The bank said escalation of trade tensions could further reduce growth, but the photos could improve once major economies attack persistent trade deals.
“Our analysis suggests that if today’s trade disputes were resolved in a contract to cut tariffs by half compared to the level in late May 2025, global growth could be on average about 0.2 percentage points stronger between 2025 and 2026,” Gill said.
The United States and many of its trading partners are currently in negotiations after US President Donald Trump imposed sudden tariffs on numerous countries in April. For example, this week, the US and China meet in London after agreeing to temporarily cut taxes after May consultations.
Also, negotiations are still underway between the US and the European Union within less than a month before the previously announced tariffs are fully implemented.
In reducing global growth expectations, the World Bank follows a variety of other institutions, including organisations of economic cooperation and development.
The OECD said earlier this month that it expected global growth to slow to 2.9% in 2025 and also took note of forecasts regarding the potential for future tariff development. Previously, we had forecast global growth of 3.1% this year.
