2020s on course to be weakest decade for global economy since 1960s, says World Bank

Published: Tuesday, June 10, 2025 at 1:30 pm

**World Bank: Global Economy Faces Weakest Decade Since the 1960s**

The World Bank has issued a stark warning, revising its global economic growth forecasts downward and predicting the 2020s will be the weakest decade for the global economy since the 1960s. The institution attributes this concerning outlook primarily to escalating trade tensions, particularly those stemming from the policies of the previous US administration.

In its latest Global Economic Prospects report, the World Bank slashed its forecast for global GDP growth this year to 2.3%, a decrease from the 2.7% predicted in January. This would represent the slowest growth rate outside of a full-blown recession since 2008. The report highlights the detrimental impact of international discord, specifically trade disputes, on global economic performance. The report notes that tariffs, even those subsequently reversed, remain significantly higher than before the previous administration took office, and uncertainty surrounding trade policy remains elevated.

The World Bank's chief economist, Indermit Gill, expressed concern that decades of economic progress in developing countries have stalled in recent years. The report indicates a slowdown in investment and trade, coupled with rising debt levels. The bank projects only a modest recovery to 2.4% growth by 2026.

The report emphasizes that the factors that fueled the economic growth of the past half-century, which lifted over a billion people out of extreme poverty, are now reversing. The World Bank urges governments to resolve trade disputes and calls on emerging market and developing economies to strengthen their financial positions through tax base expansion and reforms to attract investment. The forecast assumes that previously announced tariffs will not be reimposed. However, the bank cautions that the situation could worsen if trade restrictions escalate or policy uncertainty persists, potentially leading to increased financial stress. Rising sovereign bond yields in major economies and concerns about the sustainability of US public finances further contribute to the negative outlook. The report also highlights the debt distress faced by many low-income countries, exacerbated by declining aid flows.

BNN's Perspective:

The World Bank's assessment paints a concerning picture of the global economic landscape. While the report's focus on trade tensions as a key driver of economic weakness is understandable, it's crucial to acknowledge the complex interplay of factors influencing global growth. Addressing these challenges requires a multifaceted approach, including international cooperation to resolve trade disputes, responsible fiscal policies, and targeted investments to support developing economies.

Keywords:

World Bank, global economy, economic growth, GDP, trade war, tariffs, developing countries, debt, recession, investment, policy uncertainty, sovereign debt, economic forecast, international trade, economic outlook

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