The World Bank has slashed its global GDP growth forecast for 2025 to just 2.3%, marking the weakest expansion in 17 years outside major crises. With nearly 70% of economies facing downgrades and the U.S. outlook also trimmed, the global economy is heading into a prolonged period of sluggish growth not seen since the 1960s.
World Bank Rings Alarm Bells: 70% of Economies Face Growth Downgrades
The global economic outlook is entering a phase of renewed concern, as the World Bank has sharply downgraded its GDP projections for 2025 and beyond. According to the latest estimates, global growth in 2025 is now expected to come in at just 2.3%, marking a 0.4 percentage point cut from earlier projections made in January. This would represent the weakest expansion in five years and the slowest pace of growth in 17 years — excluding crisis-hit periods like 2008 and the pandemic-driven contraction in 2020.
The broader trend is equally troubling. From 2020 to 2026, the average global growth rate is forecasted to hover around 2.5%. If this materializes, it would make the first seven years of the 2020s the slowest-growing start to any decade since the 1960s. The prolonged period of underwhelming expansion is being seen as a red flag for governments, investors, and businesses across the globe.
One of the most concerning aspects of the World Bank’s assessment is the widespread nature of these downgrades. Roughly 70% of all national economies have seen their growth forecasts reduced. This includes both developed and emerging markets, painting a grim picture of synchronized global deceleration.
The U.S. economy, while still expected to grow, is not immune to this downward trend. The World Bank has slashed its 2025 GDP growth projection for the U.S. to just 1.4%, a significant drop from the previously estimated 2.3%. This revision underscores the growing challenges facing even the world’s most resilient economies, from high interest rates and inflation to slowing consumer demand and geopolitical tensions.
Historical data reveals just how concerning this outlook is. From the 1960s through the 2000s, global GDP growth often fluctuated between 2.5% and 5%, with sharp drops only during major economic shocks. The most notable contractions occurred during the 2008 global financial crisis and the 2020 COVID-19 pandemic, both of which temporarily pushed global growth into negative territory.
The current projected decline is not tied to a single catastrophic event but rather a culmination of persistent structural headwinds. These include tightening monetary policies worldwide, waning fiscal support, disruptions in global trade, and ongoing geopolitical conflicts. Additionally, many economies are still grappling with the aftershocks of pandemic-induced supply chain disruptions and rising debt burdens.
The June projections for 2025 and 2026 — now visibly lower than the estimates released in January — reflect a deepening concern among economists and policymakers. The latest figures suggest a continuation of tepid growth, with few signs of a near-term rebound. Compared to the more optimistic forecasts at the start of the year, the gap has widened significantly, as shown by the evident shortfall in projections.
As the global economy trudges through this sluggish phase, the onus falls on policymakers to stimulate investment, reignite productivity, and ensure financial stability. Without bold action, the world could be staring at an extended period of economic stagnation — one that affects employment, income growth, and poverty reduction efforts across the board.
Disclaimer:
The information presented in this article is intended for general informational purposes only and should not be construed as financial, investment, or economic advice. The data and projections referenced are based on publicly available sources at the time of writing and are subject to change without notice. Readers are strongly advised to conduct their own research, consult with qualified financial advisors, economists, or professionals before making any decisions based on this content.