Agency. The World Bank has cut its forecast for the global economy’s growth rate due to growing trade tensions and policy uncertainty. According to the World Economic Outlook report released by the World Bank on Tuesday, the current volatile situation has had the effect of slowing growth in about 70 percent of the world’s economies, including all lands and income groups.
According to the report, the global economic growth rate for 2025 has been reduced from 2.7 percent to 2.3 percent. Similarly, for 2026, this rate has been reduced from 2.7 percent to 2. It has been brought down to 4 percent. Developed countries are expected to grow by 1.2 per cent next year, slightly lower than previous estimates.
Developing and emerging market economies are projected to grow at 3.8 per cent in 2025, 0 per cent above the forecast. 3 percentage points lower. U.S. growth is expected to be just 1.4 percent in 2025, lower than previous forecasts and only half of 2.8 percent growth in 2024.
Both the Europe region and Japan are expected to grow at 0.7 per cent, indicating a slight decline from previous estimates. China’s growth rate, however, has remained unchanged as predicted earlier.
As noted in the report, the global economy, which was expected to recover smoothly just a few months ago, is re-entering a challenging situation. The report also warned of long-term impact on life if appropriate policy measures are not taken soon.
World Bank Group Chief Economist and Senior Vice President Indermit Gill said, “Growth in regions other than Asia is slowing, which is likely to further challenge developing countries.” Gill said progress in efforts to eliminate income inequality and reduce poverty is not enough as investment rates in developing countries are relatively low and debt burdens are high.
Future economic stability will largely depend on the direction of global trade policy, the report said. Although the report indicated some improvement in 2026 and 2027, the overall economic output level is likely to remain still below previous estimates. However, if trade sanctions rise sharply or policy uncertainty persists, economic growth is likely to decline further and financial pressures may increase, the report said.
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