World Bank Cuts Global Growth Forecast as Trade Tensions Raise Uncertainty

Outlook dims for most economies compared with 6 months ago before Trump took office

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WASHINGTON - The World Bank on June 10 slashed its global growth forecast for 2025 by four-tenths of a percentage point to 2.3 percent, saying that higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies.

In its twice-yearly Global Economic Prospects report, the global lender lowered its forecasts for nearly 70 percent of all economies — including the U.S., China and Europe, as well as six emerging market regions — from the levels it projected six months ago before U.S. President Donald Trump took office.

Mr. Trump has upended global trade with a series of on-again, off-again tariff hikes that have increased the effective U.S. tariff rate from below 3 percent to the mid-teens — its highest level in almost a century — and triggered retaliation by China and other countries.

The World Bank is the latest body to cut its growth forecast as a result of Mr. Trump's erratic trade policies, although U.S. officials insist the negative consequences will be offset by a surge in investment and still-to-be-approved tax cuts.

It stopped short of forecasting a recession, but said global economic growth in 2025 would be the weakest outside of a recession since 2008.

By 2027, global gross domestic product (GDP) growth was expected to average just 2.5 percent, the slowest pace of any decade since the 1960s.

The report forecast that global trade would grow by 1.8 percent in 2025, down from 3.4 percent in 2024 and roughly a third of its 5.9 percent level in the 2000s.

The forecast is based on tariffs in effect as at late May, including a 10 percent U.S. tariff on imports from most countries.

It excludes increases that were announced by Mr. Trump in April and then postponed until July 9 to allow for negotiations.