WASHINGTON: The World Bank on Tuesday slashed its global growth forecast for 2025 by 0.4 percentage point to 2.3 percent, saying that higher tariffs and heightened uncertainty posed a “significant headwind” for nearly all economies.
In its twice-yearly Global Economic Prospects report, the bank lowered its forecasts for nearly 70 percent of all economies — including the United States, China and Europe, as well as six emerging market regions — from the levels it projected just six months ago before US President Donald Trump took office.
Trump has upended global trade with a series of on-again, off-again tariff hikes that have increased the effective US tariff rate from below 3 percent to the mid-teens — its highest level in almost a century — and triggered retaliation by China and other countries.
The World Bank is the latest body to cut its growth forecast as a result of Trump’s erratic trade policies, although US officials insist the negative consequences will be offset by a surge in investment and still-to-be approved tax cuts.
The bank stopped short of forecasting a recession, but said global economic growth this year would be its weakest outside of a recession since 2008. By 2027, global gross domestic product growth was expected to average just 2.5 percent, the slowest pace of any decade since the 1960s.
The report forecast that global trade would grow by 1.8 percent in 2025, down from 3.4 percent in 2024 and roughly a third of its 5.9 percent level in the 2000s. The forecast is based on tariffs in effect as of late May, including a 10 percent US tariff on imports from most countries. It excludes increases announced by Trump in April and then postponed until July 9 to allow for negotiations.
The bank said global inflation was expected to reach 2.9 percent in 2025, remaining above pre-COVID levels, given tariff increases and tight labor markets.
“Risks to the global outlook remain tilted decidedly to the downside,” the bank wrote. It said its models showed that a further 10-percentage point increase in average US tariffs, on top of the 10 percent rate already implemented, and proportional retaliation by other countries, could shave another 0.5 percentage point off the outlook for 2025.
Such an escalation in trade barriers would result “in global trade seizing up in the second half of this year ... accompanied by a widespread collapse in confidence, surging uncertainty and turmoil in financial markets,” the report said.
Nonetheless, it said the risk of a global recession was less than 10 percent.
’FOG ON A RUNWAY’
Top officials from the United States and China are meeting in London this week to try to defuse a trade dispute that has widened from tariffs to restrictions over rare earth minerals, threatening a global supply chain shock and slower growth.
“Uncertainty remains a powerful drag, like fog on a runway. It slows investment and clouds the outlook,” World Bank Deputy Chief Economist Ayhan Kose told Reuters in an interview.
But he said there were signs of increased dialogue on trade that could help dispel uncertainty, and supply chains were adapting to a new global trade map, not collapsing. Global trade growth could see a modest rebound in 2026 to 2.4 percent, and developments in artificial intelligence could also boost growth, he said.
“We think that eventually the uncertainty will decline,” he said. “Once the type of fog we have lifts, the trade engine may start running again, but at a slower pace.”
Kose said while things could get worse, trade was continuing and China, India and others were still delivering robust growth. Many countries were also discussing new trade partnerships that could pay dividends later, he said.
US GROWTH FORECAST CUT SHARPLY
The World Bank said the global outlook had “deteriorated substantially” since January, mainly due to advanced economies, now seen growing by just 1.2 percent, down half a point, after expanding 1.7 percent in 2024.
The US forecast was slashed by 0.9 percentage point from its January forecast to 1.4 percent, and the 2026 outlook was lowered by 0.4 percentage point to 1.6 percent. Rising trade barriers, “record-high uncertainty” and a spike in financial market volatility were expected to weigh on private consumption, trade and investment, it said.
Growth estimates in the euro area were cut by 0.3 percentage point to 0.7 percent and in Japan by 0.5 percentage point to 0.7 percent.
It said emerging markets and developing economies were expected to grow by 3.8 percent in 2025 versus 4.1 percent in January’s forecast.
Poor countries would suffer the most, the report said. By 2027 developing economies’ per capita GDP would be 6 percent below pre-pandemic levels, and it could take these countries — minus China — two decades to recoup the economic losses of the 2020s.
Mexico, heavily dependent on trade with the US, saw its growth forecast cut by 1.3 percentage points to 0.2 percent in 2025.
The World Bank left its forecast for China unchanged at 4.5 percent from January, saying Beijing still had monetary and fiscal space to support its economy and stimulate growth.

TASHKENT: As the Middle East embraces transformation under the banner of sustainability and economic diversification, water security stands as one of the most critical obstacles and opportunities of our time.

At the helm of addressing this challenge in Saudi Arabia is Alkhorayef Water & Power Technologies, also known as AWPT. This company has not only solidified its market leadership but is now actively expanding its international footprint.

In an exclusive interview with Arab News, Rami Moussilli — CEO of AWPT since 2014 — shared key insights into the company’s strong performance in 2024, its alignment with Vision 2030, and its ambitions beyond Saudi Arabia.

Speaking at the Tashkent International Investment Forum, Moussilli told Arab News that AWPT is supporting Uzbekistan’s Sustainable Development Vision.

Uzbekistan is a key international focus for AWPT as the country undergoes significant transformation through infrastructure modernization and sustainable development. 

Moussilli noted that AWPT has held high-level discussions with multiple ministries, which culminated in a meeting with the president of Uzbekistan.

“There is strong alignment between our core strengths and Uzbekistan’s national development priorities,” said Moussilli. 

As Uzbekistan ramps up investment in urban expansion and essential services, AWPT is offering support across the entire water infrastructure lifecycle— from system rehabilitation and advanced wastewater treatment to non-revenue water reduction and energy-efficient technologies.

AWPT’s approach in Uzbekistan is built on three foundational pillars: strengthening public-private partnership frameworks, delivering engineering excellence, and promoting environmental and economic sustainability

With a focus on knowledge transfer and local capacity building, AWPT is not just exporting services; it is building lasting partnerships.

Speaking at the opening of the investment forum, Uzbekistan’s President Shavkat Mirziyoyev pledged his country’s commitment to developing green energy to ensure stable energy resources for the economy.

“Over the past short period, nearly $6 billion worth of foreign direct investment has been attracted to this sector. Electricity production has increased from 59 billion to 82 billion kilowatt-hours,” he said. “In the next five years, this figure will exceed 120 billion kilowatt-hours, and the share of green energy in the energy mix will reach 54 percent.”

He added that efforts are underway to draw $4 billion to upgrade the power grids, and by next year around 9 grids will be transferred to private partnership.

“In addition, we have launched the sale of green certificates and carbon units for the first time. This year, we will join global carbon markets and create a “Green Uzbekistan” climate investment platform,” Mirziyoyev said.

A model for the future of water

AWPT sets itself apart from others in the sector with its integrated delivery model. 

By operating across all stages of the water asset lifecycle — from design and construction to operation and rehabilitation — AWPT achieves efficiencies that traditional players often miss. 

This holistic approach allows the company to offer clients and investors a unique value proposition: resilient profitability and proven risk management.

AWPT closed 2024 with what Moussilli described as “a year of exceptional performance and strategic progress.” 

The financial numbers support this assertion. Net income surged by an impressive 64 percent over the previous year, while revenues rose by 16 percent, underscoring both strong demand and operational excellence.

Profit margins also improved significantly, growing from 8.2 percent to 12 percent, and earnings per share followed suit with over 64 percent growth. 

The company’s shareholder equity expanded by 44 percent, further bolstered by a return on equity of 38 percent and a return on assets of 35 percent, clear indicators of efficient capital and resource management. Notably, AWPT ended the year with a 300 percent increase in free cash flow, a critical marker of financial health in a capital-intensive sector.

Powering Vision 2030 through water privatization

At the heart of AWPT’s strategy lies a firm alignment with the Saudi National Water Strategy 2030, which outlines the privatization of key infrastructure sectors, including water treatment, wastewater management, and the reuse of treated effluents.

Moussilli emphasizes the instrumental role water infrastructure plays in national development, saying: “Water is no longer just a utility — it is a strategic pillar for economic resilience and public health.”

AWPT’s integrated services span the entire water and wastewater value chain — from engineering, procurement, and construction to operation and maintenance, public-private partnerships, and city management contracts. 

This depth of capability positions the company to benefit from the estimated $200 billion in upcoming water infrastructure investments under Vision 2030.

Sustainability at the core

With increasing global attention to environmental conservation, AWPT has integrated sustainability into its operational DNA. Serving over 26 million people across the Kingdom, the company advocates resource optimization, water quality, and long-term resilience.

“Our sustainable water practices are rooted in prevention, remediation, and efficiency,” said Moussilli. This includes proactive leak detection and repair of water lines, maintenance of sewage lines to prevent environmental contamination, and advanced treatment of sludge to enable its reuse in agriculture or other sectors.

“Every drop we save is a step toward decarbonizing our sector,” he added, noting that AWPT’s treatment of wastewater not only protects the environment but also allows for the reuse of treated effluent for irrigation, reducing reliance on freshwater sources.

Strategic objectives: local strength, global reach

With its commanding position in the Saudi market, AWPT is setting its sights on international expansion. 

Moussilli outlined a three-pillar strategy for the future, including a focus on sustaining market leadership in Saudi Arabia by capturing new value pools across water and wastewater infrastructure. 

Expanding into global markets and leveraging AWPT’s superior operating capabilities and integrated model as competitive advantages is another part of the vision, with diversifying into new environmental services and creating synergies around its water-centric core competencies the final pillar.

This strategy is underpinned by AWPT’s unique ability to grow both top-line and bottom-line performance simultaneously while preserving a strong balance sheet, enabling resilience even amid inflation and rising interest rates.