World Bank predicts worst decade for global growth since Trump's tariffs

The World Bank has predicted that the global economy will experience its slowest decade of growth since the 1960s due to the impact of Donald Trump's tariffs. Growth forecasts for nearly two-thirds of the world's countries have been lowered compared to the Bank's last forecast six months ago. The Bank expects global growth of only 2.3% in 2025 (0.4% lower than its January forecast), and 2.6% for 2027. Among the countries whose forecasts were lowered in the Bank's semi-annual report are Japan, Europe, and the United States. Since then, his imposition of 10% tariffs on all US imports, in addition to higher tariffs on steel and aluminum, led to a decline in financial markets in early April. In May, a trade court ruled that most of his global tariffs were illegal, but the Trump administration won an appeal to temporarily keep them in place. The bank lowered its growth forecasts for the United States in 2025 and 2026 due to escalating trade tensions that have shaken investor confidence and private consumption. However, the bank did not lower its forecasts for the United States' main rival, China, saying it has sufficient financial stability to withstand the "headwinds" resulting from global political instability. "With heightened political uncertainty and trade barriers, the global economic environment has become more challenging," the report said, warning of further "dampening political uncertainty" due to the possibility of countries taking "rapid actions" that restrict trade. The bank warned of further growth declines if the United States increases tariffs, and of higher inflation. Tariffs could "paralyze global trade in the second half of the year, accompanied by a broad collapse in confidence, heightened uncertainty, and financial market turmoil." However, the report did not predict a global recession, saying the probability was less than 10%. This came after the OECD also lowered its forecast for the global economy, projecting growth to slow to 2.9% from 3.1%. Meanwhile, a new round of talks between the United States and China was held in London to end the trade war.