WASHINGTON — Ongoing trade conflicts, particularly those involving the United States, are projected to significantly slow economic growth both domestically and globally this year, according to a new World Bank forecast released Tuesday.
While not naming President Donald Trump directly, the World Bank cited “a substantial rise in trade barriers” as a key driver behind its downgraded outlook. The U.S. economy, the world’s largest, is now expected to grow just 1.4% in 2025—half the pace of last year’s 2.8% growth and well below the 2.3% the Bank had forecast in January.
The global economic outlook was also revised downward. The World Bank now anticipates global GDP will rise by only 2.3% in 2025, a drop from the 2.8% growth rate recorded in 2024.
In the introduction to the Global Economic Prospects report, World Bank Chief Economist Indermit Gill warned that the global economy had missed its window for a “soft landing” — slowing enough to ease inflation without triggering serious economic pain. “The world economy today is once more running into turbulence,” Gill wrote. “Without a swift course correction, the harm to living standards could be deep.”
China, the world’s second-largest economy, is projected to slow from 5% growth in 2024 to 4.5% this year and further to 4% in 2026. The report pointed to several headwinds facing China: ongoing U.S. tariffs, a collapsing real estate sector, and a rapidly aging population.
Europe is also facing sluggish growth. The 20 countries that use the euro are collectively expected to expand by just 0.7% in 2025, down from 0.9% last year. European exports have been hit by U.S. trade measures, and the unpredictable nature of the tariff rollouts — which are often imposed, suspended, or altered with little warning — has created widespread uncertainty, discouraging long-term business investment.
India remains the world’s fastest-growing major economy, with expected growth of 6.3% in 2025. However, that figure is down slightly from 6.5% in 2024 and from the 6.7% projected earlier this year. In Japan, modest improvement is forecast, with growth expected to rise to 0.7% in 2025 from 0.2% last year, though that still falls short of the 1.2% growth the World Bank had anticipated in January.
The World Bank, which aims to reduce global poverty and improve living standards through grants and low-interest loans to developing countries, noted that rising global uncertainty and trade restrictions threaten its mission.
The Organization for Economic Cooperation and Development (OECD), another international body focused on promoting global economic stability, issued a similar warning last week, also downgrading its forecasts for both the U.S. and the global economy.
