Global Trade Growth To Slow To 1.8 pc In 2025 From 3.4 pc In 2024: World Bank

Chennai: Amidst trade policy uncertainties, global trade growth is expected to decelerate to around 1.8 per cent in 2025 against 3.4 per cent in 2024, finds the World Bank.

“We expect global trade growth to slow markedly this year, largely because of the cumulative effects of higher tariffs and elevated policy uncertainty,” the World Bank said.

After a strong start to the year, partly driven by frontloading ahead of tariff hikes, annual trade growth is forecast to decelerate from 3.4 percent in 2024 to around 1.8 percent in 2025.

Compared with our January projections, global trade growth for 2025 has been revised down by roughly 1.3 percentage points, with nearly all country groups experiencing downward adjustments. At this pace, trade expansion would be less than half the annual average of about 4.9 percent in the two decades before the COVID-19 pandemic.

The downgrade since January is most pronounced for advanced economies—2025 trade growth is now projected to be roughly half of earlier forecasts, while emerging market and developing economies (EMDEs) face cuts of about one-quarter.

April’s global goods import volume decelerated sharply to 2.9 per cent year-on-year, down from 6.7 per cent in March, and US goods import volumes plunged nearly 20 per cent month-on-month.

Global trade growth faces substantial downside risks amid rapidly shifting policies and persistent uncertainty. The World Bank sees national appetites for trade restrictions further increase as countries revert to previously announced higher tariffs or expand retaliatory measures, creating broader spillovers.

Such measures could prompt third markets to introduce their own trade restrictions to shield domestic industries, amplifying the dampening effect on trade flows and global demand. Beyond these near-term pressures, long-term uncertainties around supply-chain realignment add to the downside risks.

Rising barriers and lingering policy uncertainty have already begun to hurt economies, exposing them to serious downside risks, it said.