Global Growth in 2025 Hits Slowest Since 2008

Global Growth in 2025 Hits Slowest Since 2008

Why in the News?

The World Bank has retained India’s 2025-26 GDP growth at 6.3%, while warning of slowing investment and global growth amid policy uncertainty and trade tensions, projecting global GDP to expand at its slowest rate since 2008, excluding recessions.

India’s Economic Outlook Remains Strongest Globally:

• India’s GDP is expected to grow at 6.3% in FY2025-26, according to the World Bank’s Global Economic Prospects report.
• This makes India the fastest-growing large economy despite a 0.4% downgrade from January estimates.
• Exports remain weak due to global trade barriers and sluggish activity among key trading partners.
• FY2026-27 growth is revised down to 6.5%, while FY2027-28 is forecasted at 6.7%, supported by robust services exports.

Global Growth Forecast: Sharp Downturn Projected

• Global growth in 2025 is estimated at 2.4%, the slowest since 2008, excluding recession years.
• This is down from 2.7% projected in January 2025.
• Around 70% of global economies saw their forecasts downgraded due to rising policy uncertainty and trade tensions.
• 2026 global GDP may rise only slightly to 2.7%, and 2.6% in 2027.

Challenges for Developing Economies and Trade

• Developing countries are turning into “development-free zones,” per World Bank Chief Economist Indermit Gill.
• Their growth has declined from 6% (2000s) to under 4% (2020s).
• Global trade growth fell from 5% to under 2% in the same period.
• Investment growth is slow, while debt levels are at record highs.
• US tariff actions in April 2025 also contributed to trade disruptions