Global Economic Prospects-Global Economy Faces Trade-Related Headwinds
you are currently viewing::Global Economic Prospects-Global Economy Faces Trade-Related HeadwindsJune 14, 2025--The global economy is facing substantial headwinds, emanating largely from an increase in trade tensions and heightened global policy uncertainty. Global cooperation is needed to restore a more stable global trade environment and scale up support for vulnerable countries, including those in fragile and conflict situations. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To unlock job creation and long-term growth, reforms should focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. International discord-about trade, in particular-has upended many of the policy certainties that-helped shrink extreme poverty and expand prosperity after the end of World War II. This year alone, our forecasts indicate the upheaval will slice nearly half a percentage point off the global GDP growth rate that had been expected at the start of the year, cutting it to 2.3 percent. That's the weakest performance in 17 years, outside of outright global recessions. By 2027, global GDP growth is expected to average just 2.5 percent in the 2020s-the slowest pace of any decade since the 1960s. Source: worldbank.org |
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The global economy is proving more resilient than anticipated despite persistent trade tensions and policy uncertainty, according to the World Bank's latest Global Economic Prospects report.