The World Bank has significantly downgraded its global growth forecast for 2025, reducing projections from 2.7 percent to 2.3 percent amid escalating worldwide trade tensions primarily driven by United States policies.
According to the bank's latest economic prospects report released on Tuesday, this represents "the weakest performance in 17 years, outside of outright global recessions," as noted by World Bank Group Chief Economist Indermit Gill.
The downgrade comes in the wake of widespread tariffs imposed by US President Donald Trump, who in April 2025 implemented a 10 percent tariff on imports from almost all US trading partners, with higher rates targeting dozens of economies. These measures have since been temporarily suspended until early July.
Long-term Economic Slowdown Predicted
In a more concerning long-term outlook, the World Bank projects that by 2027, global GDP growth will average just 2.5 percent for the 2020s decade – potentially marking the slowest growth rate in any decade since the 1960s.
"High levels of policy uncertainty and this growing fragmentation of trade relations" were cited by Gill as key factors behind the gloomy forecast.
The ongoing trade disputes between the United States and China have also impacted global oil markets, with Brent crude trading at $66.81 per barrel and WTI at $64.98 as of Wednesday morning. Both nations have recently agreed to temporarily pause their trade war and lower some tariffs, but underlying tensions remain.
These developments come at a critical time for the global economy, which continues to face multiple challenges including inflation pressures, geopolitical conflicts, and the lingering effects of the pandemic.
For Nigeria and other developing economies, the slowdown in global growth could have significant implications for trade, investment flows, and development financing in the coming years.
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