World Bank: Global growth set for weakest non-recession run since 2008

By Joy Baba-Yesufu

The global economy is headed for its weakest stretch of growth since the 2008 financial crisis, excluding outright recessions, the World Bank has warned in its latest Global Economic Prospects report.

Amid rising trade tensions, high inflation, and policy uncertainty, global growth is projected to slow to just 2.3% in 2025, nearly half a percentage point below previous forecasts and well below pre-pandemic trends. If projections hold, the first seven years of the 2020s will mark the slowest period of average global growth for any decade since the 1960s.

According to the report, growth forecasts have been downgraded in nearly 70% of economies worldwide, spanning all regions and income groups.

“Outside of Asia, the developing world is becoming a development-free zone,” said Indermit Gill, Chief Economist and Senior Vice President for Development Economics at the World Bank.

“Growth in developing economies has declined steadily, from 6% annually in the 2000s, to 5% in the 2010s, to less than 4% so far in the 2020s.”

That trend reflects a broader slowdown in global trade, which has dropped from an average of 6% growth in the 2000s to under 3% in recent years. While investment has weakened, global debt has surged to record highs.

In 2025, growth is expected to slow in nearly 60% of all developing countries, averaging 3.8%, before inching up to 3.9% in 2026–2027. This is more than a full percentage point below the average rate in the 2010s.

Low-income countries are projected to grow by 5.3% this year, down 0.4 percentage points from earlier forecasts. Inflation remains sticky, with global inflation expected to average 2.9% in 2025 still above pre-pandemic levels driven by tariff hikes and tight labour markets in advanced economies.

Despite avoiding a global recession, the World Bank warns that without major policy reforms, growth prospects will remain fragile, particularly for economies most vulnerable to external shocks.