The World Bank has lowered its global growth forecast for 2025, citing trade tensions and the resulting political uncertainty as US President Donald Trump's sweeping tariffs have strained ties and weighed on economic prospects.

In its latest economic outlook report, the bank lowered its forecast for global GDP growth to 2.3%, down from 2.7% expected in January. This is the latest in a series of downgrades by international organizations, AFP reported.

“This is the weakest result in 17 years, excluding cases of outright global recession,” said Indermit Gill, chief economist at the World Bank Group.

The outlook for global growth and inflation for this year and next has worsened due to “high levels of political uncertainty and this growing fragmentation of trade relations,” he said.

“Without a quick course correction, the damage to living standards could be deep,” Gil warned.

By 2027, the World Bank expects average global GDP growth for the decade to reach 2.5%, which would be the slowest pace for any decade since the 1960s.

The gloomy forecasts come after Trump imposed 10% tariffs on imports from nearly all of the US's trading partners in April — and higher rates on dozens of those economies, which he then paused until early July.

He also embarked on an escalation of relations with China, although both sides have paused their trade war and temporarily reduced these staggering tariffs. However, a lasting truce remains uncertain. | BGNES