Global Trade Outlook 2025

New projections from the World Bank highlight a sharp rise in global trade policy uncertainty and slower-than-expected trade growth in 2025, raising concerns for both advanced and emerging economies. Surge in Trade Policy Uncertainty According to Figure 1.A, the Trade Policy Uncertainty (TPU) index has climbed steadily since mid-2024, with a dramatic spike in early 2025. By March and April 2025, TPU reached levels far above the historical maximum observed between 1960 and 2023. This indicates heightened unpredictability in global trade rules and policies, reflecting ongoing geopolitical tensions, shifting tariff regimes, and disruptions to supply chains. The index, calculated using automated text searches of leading international newspapers, shows that global markets are entering one of the most volatile phases of trade policy in decades. Trade Growth Projections Revised Down Figure 1.B compares current trade growth projections for 2025 with earlier forecasts made in January 2025. The latest outlook paints a weaker picture: World trade growth is now projected at under 2%, significantly lower than both January’s estimates and the long-term world average of about 5% recorded between 2000 and 2019. Advanced economies are expected to see especially weak performance, with trade growth falling below 1%. Emerging markets and developing economies (EMDEs) fare somewhat better, with growth above 3%, but still lower than earlier projections. Implications for Global Markets The combination of heightened policy uncertainty and slowing trade growth presents significant risks for the global economy. For advanced economies, weaker trade could compound existing pressures from inflation and tight monetary policies. Meanwhile, emerging markets—although still growing faster—face challenges from unstable policy environments and reduced demand from wealthier nations. Conclusion The World Bank’s latest projections suggest that 2025 may be marked by turbulence in global trade, with uncertainty at record highs and growth falling below historical trends. Policymakers and businesses alike will need to prepare for a more volatile international trading environment, where stability and predictability are becoming increasingly rare.

Global Trade Outlook 2025

Global Trade Outlook 2025: Rising Uncertainty and Slowing Growth

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