• World Bank cuts global growth forecast to 2.3% for 2025, the slowest since the 1960s.
• US tariffs and trade wars drive rising uncertainty and economic fragmentation.
• India remains the fastest-growing major economy with a projected 6.3% growth rate.
• The forecast for global GDP growth reflects the impact of heightened policy uncertainty.
• Potential trade reforms could boost global growth by 0.2 percentage points in 2025-2026.

The World Bank has sharply reduced its global growth forecast for 2025 to 2.3%, down from 2.7% projected in January, citing tariffs and trade tensions driven by U.S. President Donald Trump's policies as significant hindrances. This reflects the weakest growth outside of recessions since the 1960s, with the bank highlighting a surge in economic uncertainty that is causing a decline in investor confidence and impacting living standards adversely, according to NY Times, Le Monde, and South China Morning Post.

The World Bank attributed the reduced projections to the impact of high tariffs implemented by the U.S., which have driven the effective tariff rate to its highest in a century, exacerbating economic fragmentation globally. This has resulted in nearly 70% of economies seeing growth forecasts cut, with advanced economies suffering the most, but emerging markets are also affected, particularly commodity exporters facing low prices and volatility, according to Reuters and Al Jazeera.

Among the notable highlights in the report, India is forecast to maintain a growth rate of 6.3% for the upcoming fiscal year, making it the fastest-growing major economy, although this is a decline from the earlier 6.7% projection. Factors contributing to this adjustment include subdued industrial output and falling exports due to global uncertainties. However, the resilience in areas such as construction and services provide a stable economic outlook, as stated in the analysis from India Times and India Times.

The World Bank also warned that ongoing trade barriers could severely impact GDP growth, predicting an average global growth of just 2.5% for the remainder of the decade. Indermit Gill, the World Bank's chief economist, emphasized the need for countries to engage in policy reforms that could lead to reduced tariffs and improved trade relations, which may stimulate economic activity and mitigate the adverse effects of current trade policies. Without these reforms, the risk to economic recovery remains significant, according to India Times, BBC, and India Times.