Just six months ago, a "soft landing" for the global economy seemed within reach. But the latest Global Economic Prospects report from the World Bank delivered a sobering reality check.
The report cut its 2025 global growth forecast to 2.3% from 2.7%, and nudged the 2026 outlook down to 2.4% from 2.7%. Nearly 70% of economies—from advanced markets to emerging and developing regions—face weaker forecasts across the board.
Advanced economies are now expected to expand by 1.2% this year (down from 1.7%), while emerging markets and developing economies were trimmed to 3.8% growth (down 0.3 points). The United States forecast slid to 1.4% in 2025—half of its 2024 pace and 0.9 points below earlier estimates. The Euro Area and Japan both look at 0.7% growth, while the Chinese mainland forecasts for 2025 and 2026 hold steady.
"Without a swift course correction, the harm to living standards could be deep," the report warns, pointing to rising trade barriers and policy uncertainty as key risks. Indermit Gill, chief economist at the World Bank Group, adds: "Outside of Asia, the developing world is becoming a development-free zone," highlighting sluggish investment, record debt levels, and widening per capita gaps.
Prospects for closing extreme poverty and narrowing income disparities hinge on the evolution of trade policy. Though a tepid recovery is projected in 2026–27, world output may remain materially below January projections, with restrictions and uncertainty posing further threats.
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World Bank trims global growth outlook on trade barriers, uncertainty
cgtn.com
