The World Bank's Global Economic Prospects (June 2025) warns of growing economic headwinds. Global development is forecast at just 2.7% in 2025, one of the weakest rates outside the recession in recent decades. Business disruption, investment, and strict financial conditions are overshadowing the outlook, facing the biggest challenges with developing economies. For more than ten years, global investment has slowed down, limiting productivity improvement and delaying progress on poverty decrease. Emerging and developing economies are particularly weak, as weak capital flows and growing loans reduce their ability to close income gaps with advanced countries.

While the headline inflation is being reduced, the main inflation is kept high, keeping the interest rates high in major economies. At the same time, global trade has lost speed. Protectionism, tariff hikes, and supply chain fragmentation cost upwards and reduce the possibilities of long-term recovery. A sharp decline in foreign direct investment (FDI) is another important concern. Once a driver of technology transfer and development, its decline leaves many countries dependent on debt and domestic savings, which combines financial fragility.

The report stresses the regional departure in South Asia, which is still the fastest-growing region, while East Asia has been bogged down by a slowdown in China and weak trade. While Sub-Saharan Africa shows positive growth, it is inadequate for reducing poverty; Europe, Latin America, and the Middle East continue to confront structural and fiscal pressures. The World Bank calls for action right now to reinvigorate investment in stock, restore fiscal stability, and revive global collaboration. For delicate states, analog improvement and international support are necessary. The report warns that without decisive reforms, global inequality may deepen. However, renewed cooperation and strong policy action can still restore speed for poverty decrease and shared prosperity.