The slowest growth since 2008, the World Bank has significantly lowered its global economic growth forecast

On June 10, the World Bank released the latest Global Economic Prospects report, significantly lowering its global economic growth forecast. Affected by tariff measures and increased policy uncertainty, the growth rate of nearly 70% of economies has been lowered.

The World Bank expects global economic growth to be 2.3% in 2025, down 0.4 percentage points from its forecast in January this year. The report pointed out that except for the years when the global economy shrinks, 2025 is expected to be the slowest year for global economic growth since 2008.

The report makes it clear that the sharp increase in tariffs and continued uncertainty pose a major obstacle to the growth prospects of almost all economies. Without taking policy actions to address the increase in trade restrictions, geopolitical tensions, increased uncertainty, and limited fiscal space, it is difficult for global economic growth to improve substantially.

The World Bank expects the economic growth rate of developed economies to be 1.2% in 2025, down 0.5 percentage points from its January forecast. The US economy grew by 1.4%, down 0.9 percentage points from the January forecast; the eurozone economy grew by 0.7%, down 0.3 percentage points from the January forecast; Japan's economy also grew by 0.7%, down 0.5 percentage points from the January forecast.

Emerging markets and developing economies are expected to grow by 3.8%, down 0.3 percentage points from the January forecast. East Asia and the Pacific, Europe and Central Asia, South Asia, Latin America and the Caribbean will all see slower economic growth. But according to China News Service, the World Bank did not lower its forecast for China's economic growth this year. The World Bank believes that China's newly introduced fiscal policy support can offset the impact of rising trade barriers.

The report also predicts that global trade volume growth this year and next year will be 1.8% and 2.4% respectively, 1.3 and 0.8 percentage points lower than the January forecast respectively. It is expected that in 2026, the global economy will grow by 2.4%, down 0.3 percentage points from the previous forecast.

Indmit Gill, senior vice president and chief economist of the World Bank, also pointed out that if countries can resolve trade disputes by reaching an agreement, the global economic growth rate this year and next year is expected to be higher than the current forecast.

Earlier this month, the Organization for Economic Cooperation and Development (OECD) released an economic outlook report, lowering the global economic growth forecast for this year. The OECD expects global GDP to grow by 2.9% this year and next year. Previously, the OECD predicted that the global economy would grow by 3.1% this year and 3% next year.

The OECD also lowered its economic growth forecast for the United States this year and raised its overall inflation forecast for the United States this year. The organization expects the US economy to grow by 1.6% this year, lower than the 2.2% forecast in the March report; it expects the overall inflation rate in the United States to rise to 3.2% this year, higher than the 2.8% forecast in March. The OECD even believes that due to rising inflation, the Federal Reserve will suspend interest rate cuts throughout 2025. At present, the market generally predicts that the Federal Reserve’s first interest rate cut this year will be postponed to September, and there will be two interest rate cuts this year.