Shipping containers at a port in Shanghai. The World Bank says a slowdown in trade will further dent the pace of global economic growth. AFP
Shipping containers at a port in Shanghai. The World Bank says a slowdown in trade will further dent the pace of global economic growth. AFP
Shipping containers at a port in Shanghai. The World Bank says a slowdown in trade will further dent the pace of global economic growth. AFP
Shipping containers at a port in Shanghai. The World Bank says a slowdown in trade will further dent the pace of global economic growth. AFP

World Bank lowers global growth forecast on tariff war


Sarmad Khan
  • English
  • Arabic

The global economy is set to suffer the consequences of heightened trade tension and policy uncertainty, with the World Bank estimating the pace of growth to fall to the slowest level since 2008 outside of global recessions.

The Washington-based multilateral lender projects world economy to expand 2.3 per cent this year, about half a percentage point lower than the estimates at the start of the year, it said in its latest Global Economic Prospects report.

The turmoil caused by Washington’s bid to levy historic tariffs on its global trade has resulted in “growth forecasts being cut in nearly 70 per cent of all economies – across all regions and income groups”, the lender said on Tuesday.

Global growth is projected to slow to 2.3 per cent this year, about half a percentage point lower than the rate that had been expected at the start of the year. A global recession is not expected. Nevertheless, if forecasts for the next two years materialise, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s.

“Outside of Asia, the developing world is becoming a development-free zone,” World Bank Group’s chief economist Indermit Gill said.

Trending down for three decades

Growth in developing economies has been ratcheting down for three decades – from 6 per cent annually in the 2000s to less than 4 per cent in the 2020s.

“That tracks the trajectory of growth in global trade, which has fallen from an average of 5 per cent in the 2000s to … less than 3 per cent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels,” Mr Gill added.

The World Bank forecast for the global output is even more conservative than that of the International Monetary Fund's, which in April, slashed its growth projections on tariffs hitting 100-year highs. The IMF also warned that trade tension between the world’s two largest economies and Europe would further slow growth.

The fund lowered its 2025 global growth forecast by 0.5 percentage point to 2.8 per cent.

Although Washington has paused the historic high tariffs for a 90-day period and is negotiating with China and its other trading partners including the EU, the uncertainty has already hit global economic and trade activity.

Global economic headwind is expected to hurt about 60 per cent of all developing economies this year, that are set to rise by 3.8 per cent in 2025, more than a percentage point lower than the average of the 2010s.

Low-income countries are expected to grow by 5.3 per cent this year – a downgrade of 0.4 percentage point from the forecast at the beginning of 2025, the World Bank said.

Against rising trade barriers, developing economies should “seek to liberalise more broadly by pursuing strategic trade and investment partnerships with other economies and diversifying trade – including through regional agreements”, the World Bank said.

Regional outlook

In the Middle East and North Africa region, the lender expects aggregate gross domestic product to expand 2.7 per cent this year and further strengthen to an average of 3.9 per cent in 2026 and 2027.

In East Asia and Pacific, growth is expected to slow to 4.5 per cent this year and further weaken to 4 per cent on average in the next two years.

The World Bank expects Europe and Central Asia region economy to slow to 2.4 per cent this year, edging up slightly 2.6 per cent in 2026 and 2027.

South Asian economy is set to moderate to 5.8 per cent this year, while sub-Saharan African economic output is expected to edge up slightly to 3.7 per cent in 2025, according to world Bank data.

Company%20Profile
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Remaining fixtures
  • August 29 – UAE v Saudi Arabia, Hazza bin Zayed Stadium, Al Ain
  • September 5 – Iraq v UAE, Amman, Jordan (venue TBC)

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
5 of the most-popular Airbnb locations in Dubai

Bobby Grudziecki, chief operating officer of Frank Porter, identifies the five most popular areas in Dubai for those looking to make the most out of their properties and the rates owners can secure:

• Dubai Marina

The Marina and Jumeirah Beach Residence are popular locations, says Mr Grudziecki, due to their closeness to the beach, restaurants and hotels.

Frank Porter’s average Airbnb rent:
One bedroom: Dh482 to Dh739 
Two bedroom: Dh627 to Dh960 
Three bedroom: Dh721 to Dh1,104

• Downtown

Within walking distance of the Dubai Mall, Burj Khalifa and the famous fountains, this location combines business and leisure.  “Sure it’s for tourists,” says Mr Grudziecki. “Though Downtown [still caters to business people] because it’s close to Dubai International Financial Centre."

Frank Porter’s average Airbnb rent:
One bedroom: Dh497 to Dh772
Two bedroom: Dh646 to Dh1,003
Three bedroom: Dh743 to Dh1,154

• City Walk

The rising star of the Dubai property market, this area is lined with pristine sidewalks, boutiques and cafes and close to the new entertainment venue Coca Cola Arena.  “Downtown and Marina are pretty much the same prices,” Mr Grudziecki says, “but City Walk is higher.”

Frank Porter’s average Airbnb rent:
One bedroom: Dh524 to Dh809 
Two bedroom: Dh682 to Dh1,052 
Three bedroom: Dh784 to Dh1,210 

• Jumeirah Lake Towers

Dubai Marina’s little brother JLT resides on the other side of Sheikh Zayed road but is still close enough to beachside outlets and attractions. The big selling point for Airbnb renters, however, is that “it’s cheaper than Dubai Marina”, Mr Grudziecki says.

Frank Porter’s average Airbnb rent:
One bedroom: Dh422 to Dh629 
Two bedroom: Dh549 to Dh818 
Three bedroom: Dh631 to Dh941

• Palm Jumeirah

Palm Jumeirah's proximity to luxury resorts is attractive, especially for big families, says Mr Grudziecki, as Airbnb renters can secure competitive rates on one of the world’s most famous tourist destinations.

Frank Porter’s average Airbnb rent:
One bedroom: Dh503 to Dh770 
Two bedroom: Dh654 to Dh1,002 
Three bedroom: Dh752 to Dh1,152 

UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

Key developments

All times UTC 4

The National's picks

4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young

EXPATS
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Director: S Sashikanth

Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan

Star rating: 2/5

Lexus LX700h specs

Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor

Power: 464hp at 5,200rpm

Torque: 790Nm from 2,000-3,600rpm

Transmission: 10-speed auto

Fuel consumption: 11.7L/100km

On sale: Now

Price: From Dh590,000

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Us

Director: Jordan Peele

Starring: Lupita Nyong'o, Winston Duke, Shahadi Wright Joseqph, Evan Alex and Elisabeth Moss

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COMPANY PROFILE

Name: Grubtech

Founders: Mohamed Al Fayed and Mohammed Hammedi

Launched: October 2019

Employees: 50

Financing stage: Seed round (raised $2 million)

 

Defence review at a glance

• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”

• Prioritise a shift towards working with AI and autonomous systems

• Invest in the resilience of military space systems.

• Number of active reserves should be increased by 20%

• More F-35 fighter jets required in the next decade

• New “hybrid Navy” with AUKUS submarines and autonomous vessels

Updated: June 10, 2025, 1:30 PM`