The World Bank has sharply revised its global economic growth projections downward, warning that escalating trade barriers and policy uncertainty threaten to derail a fragile recovery. In its latest Global Economic Prospects report released Tuesday, the institution cut its 2025 growth forecast to 2.3% from 2.7%, marking the first major downward revision since January.
Advanced economies face the steepest adjustments, with U.S. growth expectations nearly halved to 1.4% for 2025. The Euro Area and Japan saw reductions of 0.3 and 0.5 percentage points respectively. China's forecasts remained steady at 4.8% for 2025 and 4.6% for 2026, positioning it as a relative anchor in Asia's economic landscape.
"The developing world outside Asia risks becoming a development-free zone," cautioned World Bank Chief Economist Indermit Gill, highlighting sluggish investment growth and record debt levels. The report notes that 70% of global economies – across all regions and income groups – now face reduced growth expectations.
While predicting a modest recovery by 2027, analysts warn the damage could be lasting. "Without swift policy corrections, we risk permanent setbacks in living standards," the report stated, emphasizing that trade policy evolution will be critical for emerging markets seeking to close income gaps with advanced economies.
Asia's relative resilience contrasts with broader global turbulence, though experts note escalating trade restrictions could trigger financial stress across all regions. The findings come six months after optimistic predictions of a "soft landing" for the world economy.
