In its latest Global Economic Prospects report, released Tuesday, the bank revised its U.S. growth estimate to 1.4 percent for 2025, down from 2.8 percent in 2024.
The Washington-based institution attributed the downgrade primarily to U.S. President Donald Trump’s tariff measures, which it said are weighing more heavily on domestic growth than on the economies of targeted trading partners.
Globally, the World Bank trimmed its growth projection to 2.3 percent, down from a previous estimate of 2.7 percent, warning that rising protectionism and heightened economic uncertainty are suppressing investment and trade across nearly all major economies.
“This would mark the slowest rate of global growth since 2008, outside of full-fledged global recessions,” the report noted.
China, the central focus of the Trump administration’s trade efforts, is expected to maintain its growth trajectory, with projections holding steady at 4.5 percent for this year and 4.0 percent for 2026.
Europe and Japan are also expected to face continued economic headwinds.
Growth in both the eurozone and Japan is projected at 0.7 percent this year, with modest recoveries anticipated in 2026, reaching 0.8 percent.
Despite the bleak outlook, the World Bank offered a glimmer of optimism. A swift resolution to trade tensions could yield modest global gains, potentially boosting growth by as much as 0.3 percentage point by 2026.
“Increased trade barriers, heightened policy uncertainty, and multiple downside risks are weighing on the global outlook,” the bank said, stressing that “revitalizing and re-energizing global dialogue and cooperation are paramount.”
Meanwhile, senior officials from the United States and China are meeting in London this week in an effort to ease tensions stemming from tariffs and export restrictions on critical materials such as rare earth minerals.
reporter
Kim Dong-young
davekim0807@ajupress.com
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