If you have been feeling a little uneasy about the state of the world’s finances lately, you are not alone.
And now, a new report from a major global institution has added its voice to the growing concern.
The warning points to a difficult period ahead—one that may test the financial wellbeing of Australians, particularly those over 50.
For many who have already weathered economic storms, this may not simply be another news headline.
It could signal something more serious about our future plans, our savings, and our superannuation.
A decade of disappointment?
The latest analysis from the World Bank paints a bleak outlook.
Global growth is expected to slow to just 2.3 per cent in 2025, down from 2.8 per cent the year prior.
To put that into context, it would be the lowest rate since the Global Financial Crisis in 2008.
If you exclude the outright recessions of 2009 and 2020, it is the weakest in decades.
What is driving this sluggish forecast? The World Bank cites a ‘succession of adverse shocks’—pandemics, wars, and climate-related disasters—while also pointing to increased trade tensions and uncertain policy environments.
Although the report avoids naming specific countries, it is widely understood that trade conflicts initiated during Donald Trump’s presidency have had a lasting effect.
Tariffs were imposed broadly, impacting both allies and rivals.
Trade wars and tariffs: Why should we care?
You may be asking yourself: how do trade disputes on the other side of the globe affect Australia?
The answer is—quite significantly. Australia relies heavily on trade, and when global commerce is disrupted, it filters down to our local economy.
Supply chains are affected, prices can rise, and opportunities for Australian exporters may diminish.
The World Bank estimates that halving global tariffs could improve economic growth by 0.2 percentage points.
That may sound modest, but in real terms, it could mean billions of dollars and thousands of jobs worldwide.
On the other hand, if tensions escalate further, the uncertainty only deepens—placing more pressure on family budgets and national economies alike.
The new normal: Slower growth, higher risks
More concerning is the outlook that even if trade improves, a full recovery is unlikely.
Growth is not expected to return to the relatively strong level of 3.3 per cent seen in 2023.
Instead, the future may hold what the World Bank calls a ‘new normal’—a period of subdued expansion, continued instability, and increased risks. This includes geopolitical tensions and extreme weather events.
For older Australians who are relying on their retirement funds, planning for the future, or supporting adult children, this is not a hypothetical issue.
Slower economic growth can lead to lower investment returns, fewer job opportunities for the next generation, and increased demand on public services.
What does this mean for your living standards?
The World Bank does not soften its language: ‘Without a swift course correction, the harm to living standards could be deep.’
That is a sobering reality, particularly for those who remember the shocks of the 1970s, the early 1990s recession, or the 2008 financial crisis.
Your turn: Have you felt the impact?
As the global economy navigates another period of uncertainty, the World Bank’s latest forecast offers a sobering view of the challenges ahead.
While some pressures may ease with timely policy adjustments, the broader picture points to a need for greater international cooperation and long-term planning to avoid deeper impacts on living standards.
What do you make of the World Bank’s outlook? Do you believe current global trade tensions are the main driver behind slowing growth, or are there other factors at play? How do you think Australia and other nations should respond to help cushion the impact on households and businesses?
Let us know your thoughts and join the conversation in the comment below. We welcome respectful and thoughtful discussion from all perspectives.
Also read: Australian beverage giant faces US tariff trouble
