World Bank cuts global growth forecast amid trade tensions

The World Bank on June 10 slashed its global growth forecast for 2025 by four-tenths of a percentage point to 2.3 per cent, saying that higher tariffs and heightened uncertainty posed a “significant headwind” for nearly all economies.

In its twice-yearly Global Economic Prospects report, the global lender lowered its forecasts for nearly 70 per cent of all economies - including the US, China and Europe, as well as six emerging market regions - from the levels it projected six months ago before US President Donald Trump took office.

Mr Trump has upended global trade with a series of on-again, off-again tariff hikes that have increased the effective US tariff rate from below 3 per cent to the mid-teens - its highest level in almost a century - and triggered retaliation by China and other countries.

The World Bank is the latest body to cut its growth forecast as a result of Mr Trump’s erratic trade policies, although US officials insist the negative consequences will be offset by a surge in investment and still-to-be approved tax cuts.

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