2025 Global Economic Growth Slows To 2.3% — Lowest In Over A Decade

The World Bank’s Global Economic Prospects report (June 10, 2025) confirms that in 2025, global economic growth is expected to drop to just 2.3%, a significant decrease of about half a percentage point from predictions made earlier in the year.

The 2020s could become the slowest-growing decade since the 1960s if the current poor pace continues. This would be the weakest global expansion outside of recessions since 2008.

Rising trade barriers and increased global policy uncertainty are major factors contributing to this downgrading. In reality, projections were lowered for around 70% of nations, including those with significant economies like the United States, China, and members of the European Union.

The advanced economies are taking the brunt of this; growth is predicted to be only about 1.2% in 2025, with both the U.S. and euro-area projections being drastically dropped to about 1.4%.

Emerging market and developing economies (EMDEs) are expected to grow at ~3.8% in 2025, slightly recovering to 3.9% in 2026–27—but still notably below the 2010–19 average of around 5%.

Low-income countries may manage around 5.3% growth, though this is also a downgrade from earlier projections and relies on stability in conflict-prone regions.

Why Germany Is Rebooting Its Economy: Key Factors Explained

Key Risks and Implications:

•Persistent trade tensions, particularly those stemming from tariff escalations and policy unpredictability, pose serious downside risk.

•Investment and consumer confidence are being dampened globally.

•Without corrective policy action—such as easing trade tensions—the report warns that global living standards could deteriorate, especially in developing economies .

This report underscores that the outlook for 2025 represents the weakest non-recessionary global growth since 2008.