Global economic growth outlook plunges to 2.3%, says World Bank

The World Bank lowered its 2025 global growth forecast to 2.3 per cent, down from 2.7 per cent previously expected.

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In its latest economic prospects report, the 189-country organisation attributed the downgrade to escalating trade tensions and policy uncertainty, noting that the US President Donald Trump's extensive tariffs have strained international ties and dampened economic outlooks worldwide.

This revision marks the latest in a series of downgrades by international organisations.

Meanwhile the International Monetary Fund said that its next global growth forecast in July will take into account both positive and negative trade developments but declined to predict a tariff-driven GDP downgrade similar to that released by the World Bank this week.

IMF spokesperson Julie Kozack said that since the last release of the Fund's World Economic Outlook in April, there have been some positive developments that could support improved economic activity, including a major tariff reduction between the US and China and an initial trade deal between the US and Britain.

"So taken together such announcements combined with the April 9 pause on the high level of tariffs, these could support activity relative to the forecast that we had in April," Kozack told a regular IMF news briefing. "But nonetheless, we do have an outlook for the global economy that remains subject to heightened uncertainty, especially as trade negotiations continue."

The IMF also will take into account US President Donald Trump's added steel and aluminium tariffs, she said. These have now reached 50 per cent for all exporters.