Moderate global growth predicted for 2025-2026 amid economic challenges

Friday 17 January 2025 - 14:33

According to a report released on Thursday by the World Bank, global economic growth is projected to be moderate in 2025 and 2026, with an expected growth rate of 2.7%. This aligns with the anticipated growth for 2024. Additionally, emerging economies are expected to experience a 4% growth rate during the same period. However, these nations are facing the lowest long-term growth rates since 2000.

The report emphasizes that the world economy is confronting several significant challenges, including shifts in trade policies, increasing economic uncertainty, geopolitical tensions, climate change issues, and persistent inflation. These factors are hindering the full recovery of major economies.

The report also references economic simulations which suggest that a 10% tariff increase by the United States could result in a 0.3% decline in global growth if other countries respond similarly. If trade partners react, U.S. GDP could decline by 0.9%, while a more moderate response would lead to a 0.4% drop in U.S. GDP.