The World Bank has revised its economic growth forecasts for the United States and the global economy, attributing downturns to heightened trade barriers stemming from President Donald Trump’s trade policies. In its latest Global Economic Prospects report, the bank anticipated that the U.S. economy would grow by only 1.4% this year, a significant downgrade from January’s forecast of 2.3% for 2025. Globally, growth is projected to reach just 2.3%, down from 2.8% in 2024.
World Bank chief economist Indermit Gill noted that the world has missed the opportunity for a “soft landing,” as inflation initiatives now threaten living standards. Trump’s trade policies, characterized by aggressive tariffs on imports, have raised costs and created retaliatory measures from other nations. For instance, China is predicted to see a slowdown in growth, from 5% in 2024 to 4.5% this year, affected by tariffs, a collapsing real estate market, and an aging workforce. Similarly, Eurozone countries are expected to grow merely 0.7% in 2025, impacted by reduced export capacity due to U.S. tariffs.
India is projected to remain the fastest-growing major economy at 6.3%, although this is a slight decline from the previous year. Japan’s growth is forecast to increase modestly from 0.2% in 2024 to 0.7% this year. The World Bank’s goals include reducing poverty and improving living standards through grants and low-interest loans to poorer nations. Additionally, the Organization for Economic Cooperation and Development recently downgraded its forecasts for both the U.S. and global economies, highlighting widespread concerns over economic stability.
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