In a recent report, the World Bank has predicted that economic growth in the United States and worldwide will be notably hampered this year due to ongoing trade disputes. These trade conflicts, initiated by President Donald Trump’s policies, are anticipated to impact the U.S. economy, reducing its growth rate to 1.4% in 2025 from a growth rate of 2.8% in 2024. This represents a significant downgrade from the previous forecast of 2.3% growth made in January for 2025.
Globally, the World Bank has adjusted its forecasts downward, now expecting worldwide economic growth to reach only 2.3% this year, a reduction from the 2.8% seen in the previous year. The World Bank’s chief economist, Indermit Gill, expressed concern that the global economy is encountering renewed challenges, and without immediate changes, there is a risk of a significant decline in living standards. Gill noted that the chances for a “soft landing” to slow inflation without severe consequences have been missed.
The United States’ economic outlook has been muddled by Trump’s unpredictable and aggressive trade strategies, including imposing tariffs of 10% on imports from nearly all countries. These measures have not only increased costs within the U.S. but have also led to retaliatory actions from trading partners.
China, a key player in the international arena, is facing its own economic slowdown. The forecast for China indicates a deceleration in growth from 5% in 2024 to 4.5% in 2025, further declining to 4% the following year. The decline is attributed to the tariffs placed on its exports, a weak real estate market, and demographic challenges like an aging population.
The Eurozone, comprised of 20 nations using the euro, is expected to experience collective growth of only 0.7% in 2025, a reduction from the already modest 0.9% growth recorded in 2024. The broader European economy is also being affected by the U.S. tariffs, which hinder exports and create an unstable business environment due to the erratic nature of the tariff implementations.
Amongst the major economies, India is projected to lead growth, although its expected growth rate of 6.3% represents a slight decline from 6.5% in 2024 and a further reduction from the 6.7% anticipated at the beginning of the year for 2025. Japan is predicted to see an increase in growth, yet merely from 0.2% in 2024 to a subdued 0.7% this year, falling short of the initial 1.2% forecast.
Beyond its economic forecasts, the World Bank’s mission is to alleviate poverty and improve living standards by providing low-interest loans and grants to poorer countries. The Organization for Economic Cooperation and Development, another entity dedicated to fostering global prosperity, also recently downgraded its projections for both the U.S. and global economies.