The World Bank has issued a warning of a global economic slowdown, with its latest projections showing a steady decline in growth across both advanced and developing economies.
According to the June 2025 Global Economic Prospects report, global growth is expected to decelerate to 2.6% in 2024, down from earlier expectations, and will only rise slightly to 2.7% in 2025.
This is significantly below the average growth rate of the 2010s, underscoring the impact of persistent inflation, tight monetary policies, and geopolitical uncertainties.
The Bank attributes this downturn primarily to high interest rates maintained by central banks in response to inflation, reduced trade activity, and subdued investment levels. Conflicts—particularly the Russia-Ukraine war and unrest in the Middle East—have further strained the global economic outlook.
Growth in advanced economies is forecasted to slow from 1.7% in 2023 to 1.5% in 2024. The U.S. economy, while showing resilience, will likely see reduced momentum due to stringent monetary policy. Europe faces stagnation, while Japan grapples with demographic pressures and subdued domestic demand.
Emerging markets and developing economies are also projected to experience a modest expansion, rising only to 4% in 2025.
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These countries, the report notes, continue to face capital outflows, currency depreciation, and debt vulnerabilities—particularly in Sub-Saharan Africa and parts of Latin America.
World Bank Chief Economist Indermit Gill said that while inflation is easing globally, the path to recovery remains uneven. “The global economy is not in crisis, but it is in a state of stagnation,” he remarked. “For many developing countries, growth is simply too slow to make meaningful gains in reducing poverty.”
The report also highlights growing concern over debt sustainability, especially for low-income countries that borrowed heavily during the pandemic. The World Bank urges structural reforms and strategic investments in education, infrastructure, and energy transition to counter the long-term effects of slow growth.
The institution recommends continued vigilance by policymakers, targeted fiscal support to vulnerable populations, and international cooperation to stabilize markets and foster inclusive development.
As 2025 unfolds, global leaders are now confronted with the challenge of stimulating economic recovery without reigniting inflation, in a world increasingly shaped by technology, climate change, and evolving trade dynamics.
NAN
