The World Bank has downgraded its 2025 global growth forecast to 2.3 percent from an earlier projection of 2.7 percent, citing escalating trade tensions, policy uncertainty and deteriorating investment conditions.
The revised outlook marks the slowest pace of global expansion in 17 years, excluding the recessions caused by the 2008 global financial crisis and the 2020 COVID-19 pandemic.
In its latest Global Economic Prospects report released on Tuesday, the Washington-based multilateral institution warned that without immediate corrective measures, the current trajectory could result in long-term damage to living standards and deepen the economic divide between developed and emerging economies.
“The world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep,” said Indermit Gill, Chief Economist at the World Bank.
The report highlighted that international discord—particularly surrounding trade—has upended the policy stability that drove global growth and poverty reduction in the post-World War II era.
The return of aggressive tariff regimes and protectionist measures, particularly under U.S. President Donald Trump’s new administration, has further compounded the fragile recovery in global markets.
According to the Bank, the current pace of global GDP expansion in the first seven years of the 2020s is on course to average just 2.5 percent, the weakest for any decade since the 1960s.
The World Bank attributed the sharp downgrade to shocks in supply chains, reduced capital investment and paralysis in policy decision-making amid geopolitical uncertainty.
“President Trump’s renewed tariffs have disrupted global trade flows, triggered volatility in financial markets, and created uncertainty in cross-border investments,” the report stated.
The forecast is particularly grim for low-income economies. The World Bank estimates that per capita GDP levels in the poorest countries will be six percent lower by the end of the decade compared to pre-pandemic trends, excluding China.
Emerging Markets and Developing Economies (EMDEs) may take up to two decades to recover from the economic setbacks of the 2020s, the Bank warned.
Growth in Sub-Saharan Africa is projected to edge up modestly from 3.5 percent in 2024 to 3.7 percent in 2025, with the region expected to average 4.2 percent growth over 2026–2027.
However, the pace remains below potential and insufficient to meaningfully reduce poverty. The Bank identified inadequate per capita income gains and a severe jobs challenge as key structural constraints.
“Progress in these areas is likely to be impeded by the looming jobs challenge, which is expected to be the most acute in SSA relative to other regions,” the report noted.
The World Bank retained its forecast for Nigeria’s GDP to grow by 3.6 percent in 2025, up from 3.4 percent in 2024. Growth is projected to average 3.8 percent between 2026 and 2027, driven primarily by the services sector, including financial services and information and communication technology.
“Domestic reforms have helped spur investment, supporting growth in the services sector,” the Bank noted. Key reforms such as the floating of the naira, removal of fuel subsidies, and fiscal adjustments at the subnational level have strengthened Nigeria’s macroeconomic fundamentals.
The Central Bank of Nigeria (CBN), which raised policy rates six times in 2024 to curb inflation, has remained committed to its mandate of price stability. While inflation remains elevated, it has begun to ease in recent months, with expectations of a gradual decline over the medium term.
