The World Bank has warned that the global economy is headed for its slowest growth since the 1960s, as the effects of trade tensions, including Trump tariffs, continue to weigh on global trade.
Nearly two-thirds of countries have seen their growth forecasts downgraded compared to earlier projections. India is among those affected, with its growth forecast revised downward from the estimates shared in January. This Global Economic Prospects (GEP) report from the World Bank provides an overview of global and regional economic trends, including growth forecasts and key rates.
Forecasts by the World Bank
The Global growth predicted by the World Bank for 2025 is 2.30 percent, lower than the 0.40 percent, which was predicted earlier in January this year. Global growth for 2027 is predicted to be 2.60 percent.
The report said that with rising policy uncertainty and more trade barriers, the global economy is facing tougher times. It also warned that if countries continue to make sudden changes and add more trade restrictions, it could hurt business confidence even further.
India’s growth forecast for FY26 GDP has also been cut down by 40 basis points to 6.30 percent from what was shared earlier in 2025. For FY27 and FY28 World bank has given the forecast to be 6.60 percent.
India’s growth slowed down in FY25 due to weaker investment and slower growth in industrial production. In FY26, India’s growth may slow down because exports are expected to be weaker. This is due to slower economic activity in major trading partner countries and increasing global trade barriers.
The global economy is under pressure due to rising trade tensions and policy uncertainty, limiting growth, especially for emerging and developing economies (EMDEs).
This weak outlook affects job creation and poverty reduction, worsened by low foreign investment. The World Bank urges global cooperation and domestic reforms to stabilise trade, control inflation, boost investment, and improve institutions, human capital, and labour markets.
Written By Abhishek Das
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