The World Bank announced that the global economic growth rate for this year is projected to be 2.5%, a decrease of 0.4% from last year. This figure is also 0.1 percentage points lower than the forecast made in January (2.6%), attributed to rising energy prices and inflation pressures stemming from conflicts in the Middle East.
Specifically, the World Bank assessed that the negative factors affecting this year's growth outlook outweigh the positive ones. It noted that if conditions such as renewed hostilities in the Middle East, prolonged blockades in the region, trade policy uncertainties, monetary tightening, and climate disasters materialize, growth rates could decline further by 0.4 to 0.8 percentage points. Conversely, the expansion of investments related to artificial intelligence (AI) and productivity improvements through AI could serve as positive influences.
Regionally, advanced economies are expected to see a growth rate of 1.5%, down 0.3 percentage points from last year. In the United States, despite strong consumer spending and active AI investments, growth is projected to be constrained by the impacts of the Middle East conflicts, settling around 2.2%.
Additionally, while the Eurozone experienced solid economic performance at the beginning of the year, its high dependence on imports of natural gas and crude oil has significantly affected growth due to soaring energy prices. Japan is also expected to see a slowdown in growth compared to 2025, as rising energy costs burden consumption and exports.
The growth rate for emerging and developing countries is projected to decline by 0.8 percentage points to 3.6% this year. In China, ongoing stagnation in the real estate sector is expected to dampen growth; however, the country’s oil reserves and high share of renewable energy may buffer some of the impacts from the Middle East conflicts. The East Asia and Pacific region is anticipated to experience weakened growth trends due to its reliance on oil and gas from the Middle East and the slowdown in China's growth.
In contrast, South Asia is expected to maintain a solid growth foundation, with a temporary slowdown followed by recovery. The Middle East and North Africa, directly affected by conflicts, are projected to see a significant drop in growth rates due to disruptions in energy production and exports.
The World Bank has also proposed policy measures for the international community and developing countries. It urged the international community to enhance cooperation through strengthening multilateral trade systems to secure energy and food security and accelerate energy transitions. For developing countries, efforts to curb inflation, maintain financial stability, and ensure fiscal sustainability are deemed necessary, along with the importance of creating a foundation for job creation.
* This article has been translated by AI.
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