Global growth is now projected to slow to 2.3 per cent in 2025

Global growth is now projected to slow to 2.3 per cent in 2025, nearly half a percentage point lower than earlier expectations, according to the World Bank’s latest Global Economic Prospects report. Heightened trade tensions and policy uncertainty are pushing global growth to its weakest pace since 2008, outside of full-blown recessions.

The economic outlook has worsened across the board, with growth forecasts cut in nearly 70 per cent of economies, spanning all regions and income levels. While a global recession isn’t expected, if current forecasts hold, average global growth in the 2020s’ first seven years will be the slowest since the 1960s.

“Outside of Asia, the developing world is becoming a development-free zone," said Indermit Gill, the World Bank Group’s chief economist and senior vice president for development economics. “It has been advertising itself for more than a decade. Growth in developing economies has ratcheted down for three decades—from 6 per cent annually in the 2000s to 5 per cent in the 2010s—to less than 4 per cent in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5 per cent in the 2000s to about 4.5 per cent in the 2010s—to less than 3 per cent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels.”