The Cosco Shipping France containership is moored at the Long Beach Container Terminal at Middle Harbor in the Port of Long Beach in April. (Damian Dovarganes/AP/File)

The World Bank on June 10 cut its forecast for global growth this year and warned that the 2020s are on track for the weakest performance for any decade since the first Apollo moon landing because of trade tensions and policy uncertainty.

The Washington-based development lender lowered its 2025 outlook to 2.3%, from 2.7% projected in January. That pace would be the weakest in 17 years, outside of the recessions in 2009 and 2020 created by the shocks of the global financial crisis and COVID-19 pandemic.

It also warned, based on its current forecasts, that global growth in the first seven years of this decade is on course to average 2.5%, the slowest for any decade since the 1960s.

Donald Trump returned to the White House this year determined to supercharge his campaign against free trade, which his administration has blamed for hollowing out the country’s manufacturing base and leaving the world’s top economy vulnerable to supply chain disruptions.

But the uncertainty and volatility of Washington’s on-again, off-again tariffs, thrown up against economic and security foes like China but also against allies, has shocked markets, paralyzed investments and disrupted supply chains.

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“The world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep,” Indermit Gill, the World Bank’s chief economist, wrote in a foreword to the report. “International discord — about trade, in particular — has upended many of the policy certainties that helped shrink extreme poverty and expand prosperity after the end of World War II.”

The institution pointed that the global outlook would brighten if trade tensions de-escalate and if governments rein in borrowing and focus on job creation.

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The World Bank lowered growth forecasts for almost 70% of all economies in its latest Global Economic Prospects report.

  • Slower growth is expected in nearly 60% of all developing economies this year, a 0.3 percentage point downgrade from the January forecast.
  • Low-income countries are tipped to grow 5.3% this year — a downgrade of 0.4 ppt.
  • The U.S. will grow 1.4% this year, some 0.9 ppt lower while China’s forecast is unchanged at 4.5%.
  • The euro area and Japan are forecast to both grow by 0.7%, a downgrade of 0.3 ppt and 0.5 ppt, respectively.

“Growth could turn out to be lower if trade restrictions escalate or if policy uncertainty persists, which could also result in a buildup of financial stress,” it warned in the report. Other risks include spillovers from weaker growth in major economies, worsening conflicts and extreme weather events.