Brace for Impact: World Bank Warns of a Dismal Economic Decade Ahead

The World Bank has issued a stark prediction for the global economy, forecasting the slowest decade of growth since the 1960s. With the impact of Donald Trump’s tariffs resonating across nations, nearly two-thirds of countries have seen their economic growth forecasts slashed. The bank anticipates a meager global growth rate of just 2.3% by 2025—a significant reduction of 0.4% from earlier predictions made just six months prior.

The report highlights downward revisions for Japan, Europe, and the US, resulting in a bleak outlook for the American economy due to escalating trade tensions that are shaking investor confidence and consumer behavior. Even though the US faces a downgraded growth outlook, China remains stable as it manages to navigate these global challenges with sufficient financial resilience.

Amidst this uncertainty, the World Bank emphasizes the challenges posed by heightened policy uncertainty and escalating trade barriers interfering with economic stability. A key concern raised is that if tariffs rise further, it could lead to a freeze in global trade by the latter half of the year, resulting in declining business confidence and rampant market turmoil.

Despite this grim forecast, the report stops short of predicting a global recession, estimating the probability to be below 10%. This warning comes alongside a similar outlook from the OECD, which has also revised its estimates downward, now projecting a modest global growth rate of 2.9%.

As the trade war between the US and China continues, recent discussions in London signal an effort to address the mounting economic tensions, attempting to stave off the doubts plaguing the global market.