World set for worst growth since 1960s: Hopes of a Roaring 20s dashed in decade of woe
The global economy is on course for its weakest decade of growth since the 1960s, the World Bank warned yesterday.The latest forecast found that while gross domestic product has rebounded since Covid and proved resilient to shocks such as tariffs, expansion will be ‘sluggish’ in coming years.The report painted a picture of a world increasingly able to shrug off crises but less able to step up the pace of expansion, especially in poorer countries.Governments are also saddled with record levels of debt.The forecast is a far cry from hopes at the beginning of the decade for a ‘roaring Twenties’ for the world economy.Organisers of next week’s annual World Economic Forum (WEF) in Davos, meanwhile, said the world was facing its greatest upheaval since the end of the Second World War. Gloomy predictions: The latest forecast from the the World Bank found that while gross domestic product has rebounded since Covid, expansion will be ‘sluggish’ in coming yearsThe event – due to be attended by US President Donald Trump – will come during a period of deepening global schisms from Ukraine and Gaza to Greenland, Iran and Venezuela.The World Bank’s Global Economic Prospects report predicted growth will slow slightly to 2.6 per cent this year from 2.7 per cent last year.These are upgrades from previous forecasts of 2.4 per cent for 2026 and 2.3 per cent last year, mainly thanks to a better-than-expected performance by the US.Growth last year was boosted by a surge in trade ahead of new tariffs coming in as part of Trump’s trade war, though this is expected to fade this year.The report added: ‘The outlook for the global economy remains subdued and highly uncertain, hindering prospects for job creation.’World Bank chief economist Indermit Gill said: ‘With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty.‘If the [World Bank] forecasts materialise, the average growth rate of this decade will be the lowest since the 1960s.’ Gill said the ‘depressing statistic’ masked an even more grim reality, that while advanced economies were richer than before Covid more than a third of low income economies will be poorer than five years ago.He added: ‘In short, growth in the 2020s has hardly been the rising tide that lifts all boats – certainly not the kind that freed more than a billion people from extreme poverty in the 1990s and 2000s.’The organisers of next week’s Davos meeting of business and political leaders – which will have the theme ‘a spirit of dialogue’ – acknowledged the background of discord.WEF boss Borge Brende said: ‘Our annual meeting is taking place against the most complex geopolitical backdrop since 1945. Dialogue is not a luxury – dialogue is really a necessity.’Trump will be in Davos after attending the 2025 event via videolink days following his inauguration. He delivered a message to leaders that gave an early indication of the steep tariffs he announced months later.His appearance this year comes during a period of deep controversy over the US’s intervention in Venezuela and threats to Greenland.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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World set for worst growth since 1960s: Hopes of a Roaring 20s dashed in decade of woe
