The World Bank released on June 12, 2025 its “Global Economic Prospects – June 2025” report in which it estimated world economic growth to have dropped from around 3.3% in 2022 to 2.8% in each of 2023 & 2024, projecting growth to slow to 2.3% in 2025 before rebounding to 2.4% in 2026 and 2.6% in 2027. The World Bank commented that just when it appeared that things were stabilizing, the global economy seems to be heading once again into turbulence on the back of the recent trade war. The report added that the massive shift in tariff hikes has toppled many of the policies that contributed to reducing extreme poverty and fostering prosperity following the end of World War II. The report elaborated that the ramifications are being felt already, with growth for the year 2025 being slashed half a percentage point compared to the 2.8% projected figure made at the onset of the year, while also noting that the aforementioned 2.3% projected growth figure is the weakest performance since 17 years (apart from the recession periods). The World Bank then warned that barring a “swift course correction”, the damage to living standards would be big.

The report revealed that growth in advanced economies dropped from circa 2.9% in 2022 to 1.7% in 2023 and an estimated 1.7% in 2024, projecting said figure to slow to 1.2% in 2025 before inching upwards to 1.4% in 2026 and 1.5% in 2027. Concerning Emerging Markets and Developing Economies (EMDEs), the World Bank estimated growth to have slowed to 4.2% in 2024 compared to 4.4% a year earlier, while projecting growth to further decelerate to 3.8% in each of 2025 & 2026 before also inching upwards to 3.9% in 2027. The report commented that EMDEs’ ability to bridge the per-capita income gap with that of richer countries, as well as their capacity to accelerate job creation and slash extreme poverty levels remains insufficient. The report added that the outlook for said countries is bound by some downside risks, namely the escalation of trade barriers, persistent policy uncertainty, rising geopolitical tensions, and an increased prevalence of extreme climate events. This is further aggravated by the fact that the Foreign Direct Investments in EMDE countries have dropped by 50% since 2008, and are expected to remain subdued.

On the regional front, the World Bank estimated economic growth in the Middle East & North Africa (MENA) region to have improved from 1.6% in 2023 to 1.9% in 2024, and projected it to accelerate to 2.7% in 2025, 3.7% in 2026 and 4.1% in 2027. In details, the anticipated rally in oil activity in oil-exporting counties coupled with the easing geo-political tensions should more than offset the impact of the simmering global trade tensions, lower oil prices and waning global demand. The World Bank warned, however, that despite the better geo-political situation, tensions remain high while maritime transit via the Suez canal remains restrained by security concerns in Yemen. The report noted, moreover, that economic growth projection for the year 2025 and 2026 for the MENA region is 0.7 & 0.4 percentage-points below the January 2025 forecast on a respective basis, reflecting the impact of the trade war. Delving further into details, the report mentioned that growth in oil-exporting MENA countries is expected to improve from an estimated 1.9% in 2024 to 2.7% in 2025, 3.6% in 2026 and 4.0% in 2027. As per the World Bank, the external position of GCC countries remained robust, as the growth in exports of non-oil merchandise and services (including tourism) more than offset the impact of the reduced oil production. In addition, the report mentioned that inflation remained contained in these countries thanks to their fixed exchange rate regimes. As for oil-importing MENA countries, the report mentioned that the economy  is expected to have slowed from 2.7% in 2023 to 2.3% in 2024, with growth projected to accelerate to 3.6% in 2025, 3.9% in 2026 and 4.3% in 2027, thanks to a rising private consumption, a recovery in agricultural output and an expected easing of geo-political tensions.

On a local basis, the World Bank commented that Lebanon’s real GDP has contracted by 0.6% in 2022 and 0.8% in 2023, estimating growth to have dropped markedly to -7.1% in 2024 (revised from -5.7% as per the January 2025 estimates) due to the ramifications of the escalation of the conflict. The World Bank projected, however, the Lebanese economy to grow by 4.7% in real terms in 2025 owing to an improved tourism activity, a recovery in private sector consumption and a rise in capital inflows. The report noted that forecasts beyond the year 2025 for Lebanon were removed due to a high degree of uncertainty.