Strategically Navigating Weaker Global Growth

Global economy is seen running into turbulence as trade and geopolitical uncertainties threaten unwinding the gains of yesteryears. The World Bank, in its Global Economic Prospects (GEP, 2025) report for June 2025, forecasts global growth at 2.3% in 2025, slowest growth reading after 2008 with exception of outright recessions.

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Most economies are likely to witness slower growth compared to last year. India is seen resilient at 6.3% growth in 2025. The World Bank estimates developing economies having per-capita GDP levels 6% lower in 2027, compared to pre-Covid trend. With exception of China, it will take a couple of decades for developing economies to recover the economic losses of 2020s.

The GEP, 2025 notes trade borne disruptions could complicate road to global recovery, and it calls on developing economies to lower tariffs with respect to all trading partners. There remains a lot to be desired, however. The 90-days pause on Liberation Day Tariffs introduced by Trump administration will end soon with very little to show in outcome of negotiations underway between the USA and trading partners.

China has shown considerable hold on the USA, especially in rare minerals supply, which has become a key source of friction between the USA government approach to China and the USA firms sourcing business in China. Nevertheless, China's outbound shipments to the USA have shown decline in June, after showing resilience in April and May, affirming tariffs taking toll on demand.