•Retains Nigeria’s growth projection at 3.6% 

•Downgrades growth forecasts for 70% of economies

Ndubuisi Francis in Abuja

The World Bank has declared that trade tensions which have been triggered by the United Sates President, Donald Trump, and policy uncertainty were expected to drive global growth down in 2025 to its slowest pace since 2008, outside of outright global recessions. According to the World Bank’s latest Global Economic Prospects report, the turmoil has resulted in growth forecasts being downgraded in nearly 70 per cent of all economies—across all regions and income groups.

In the report, the bank lopped 0.4 percentage points off its forecast for global growth this year. It now expects the world economy to expand just 2.3 per cent in 2025, down from 2.8 per cent in 2024.

The expected slowdown to 2.3 per cent  is nearly half a percentage point lower than the rate that had been expected at the start of the year.

However, the bank retained its April 2025 growth projection for the Nigerian economy at 3.6 per cent in 2025, 3.7 per cent in 2026 and 3.8 per cent in 2027.

The outlook for the Sub-Saharan Africa economy which is also affected by global spillovers is projected to strengthen to 3.7 per cent in 2025 and average 4.2 per cent in 2026- due

to heightened uncertainty and potential adverse trade policy changes

Although the report does not envisage a global recession, nevertheless, if forecasts for the next two years materialise, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s. 

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

 “It has been advertising itself for more than a decade. Growth in developing economies has ratcheted down for three decades—from 6 per cent annually in the 2000s to 5 per cent in the 2010s—to less than 4 per cent in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5 per cent in the 2000s to about 4.5 percent in the 2010s—to less than 3 percent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels.”

Growth is expected to slow in nearly 60 percent of all developing economies this year, averaging 3.8 per cent in 2025 before edging up to an average of 3.9 per cent over 2026 and 2027.

 That is more than a percentage point lower than the average of the 2010s. Low-income countries are expected to grow 5.3 per cent this year—a downgrade of 0.4 percentage point from the forecast at the start of 2025. Tariff increases and tight labor markets are also exerting upward pressure on global inflation, which, at a projected average of 2.9 per cent in 2025, remains above pre-pandemic levels.

Slowing growth will impede developing economies in their efforts to spur job creation, reduce extreme poverty, and close per capita income gaps with advanced economies.

Per capita income growth in developing economies is projected to be 2.9 percent in 2025—1.1 percentage points below the average between 2000 and 2019.

The report argued that in the face of rising trade barriers, developing economies should seek to liberalize more broadly by pursuing strategic trade and investment partnerships with other economies and diversifying trade—including through regional agreements.

Given limited government resources and rising development needs, it urged policymakers to focus on mobilising domestic revenues, prioritising fiscal spending for the most vulnerable households, and strengthening fiscal frameworks. 

To accelerate economic growth, it called on countries to improve business climates and promote productive employment by equipping workers with the necessary skills and creating the conditions for labor markets to efficiently match workers and firms. Global collaboration will be crucial in supporting the most vulnerable developing economies, including through multilateral interventions, concessional financing, and, for countries embroiled in active conflicts, emergency relief and support, the report added.