"It seems we are heading for more turbulence": World Bank downgrades its growth forecast for 2025

According to its Global Economic Outlook report released Tuesday, global growth is expected to reach 2.3% this year, a drop of 0.4 percentage points (pp) compared to what the institution anticipated at the start of the year.

A trend in line with the outlook published in recent months by the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD), confirming the ongoing slowdown in the global economy.

"Just six months ago, a soft landing seemed in sight (...). Now, it seems we are heading towards more turbulence. Without a course correction, the consequences for living conditions could be profound ," warned the World Bank's chief economist, Indermit Gill, during an online press conference.

The cause is the effects of the increase in customs duties in the United States, as imposed by Donald Trump, and the trade war it has triggered between Washington and Beijing, resulting in a slowdown in global trade.

"Due to the high level of political uncertainty and increasing trade fragmentation, our outlook for 2025 and 2026 has deteriorated," Gill insisted.

While the Bank has ruled out the risk of recession this year, it believes that "if forecasts for the next two years materialise" , the global economy will experience its weakest average growth since the 1960s over the first seven years of the 2020s .

"No-development zones"

The slowdown is particularly concentrated in the major economies, and especially the most advanced ones.

The outlook for the US economy has thus been revised downwards by almost 1pp compared to January, to 1.4% now expected this year, before a slight recovery to 1.6% in 2026.

The Eurozone economy, for its part, lost 0.3pp compared to the previous report, with growth anticipated at 0.7% this year, and barely better in 2026, at 0.8%.

The consequences are also very concrete for emerging and developing countries, which are, "outside of Asia, areas without development" at present, Mr. Gill worried.

" Growth in developing economies has slowed over the past three decades . So have global trade and investment growth. At the same time, debt has soared to record levels," he said.

For these countries, average growth is expected to reach 3.8% this year, before rising slightly to 3.9% in 2026 and 2027, an average of 1pp less than during the 2010s, while at the same time, inflation is expected to remain at levels higher than those experienced before the Covid-19 pandemic.

"Work in good faith"

The slowdown is marked for the main emerging countries, with Chinese growth now expected at 4.5% this year and slowing down in the following two years, while India is holding up better, at 6.3% in 2025.

The rest of the world, however, could rebound if trade tensions between major global economies ease , which would have a positive effect by reducing the political uncertainties and financial volatility seen in recent months.

Especially if "everyone works in good faith" , notably to "reduce tariff and non-tariff barriers with the United States" , Indermit Gill stressed.

"And I think we have to start with the G20 countries, because they represent 85% of the global economy and are the ones that have implemented the most anti-trade measures," he added.

An approach that must, however, concern all trading partners, not just the United States, he argued.

But the World Bank also invites developing countries to establish other trade partnerships, diversifying their markets, calling in particular for strengthening intraregional links, an idea also put forward by the International Monetary Fund (IMF).

At the same time, it calls for the continuation of reforms aimed at improving the business climate, the efficiency of the job market and strengthening the financial resources of States.