(Kitco News) – Heightened trade tensions and policy uncertainty will see global growth fall to its slowest pace since 2008 outside of global recessions, but precious metals like gold, silver, and platinum will outperform amidst the slowdown, according to the latest Global Economic Prospects (GEP) report from the World Bank.
“Global growth is projected to slow to 2.3 percent in 2025, nearly half a percentage point lower than the rate that had been expected at the start of the year,” the World Bank said in a press release on Tuesday. “A global recession is not expected. Nevertheless, if forecasts for the next two years materialize, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s.”
The economic turmoil has resulted in growth forecasts being cut in nearly 70% of all economies, and across all regions and income groups.
“Outside of Asia, the developing world is becoming a development-free zone," said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics. “It has been advertising itself for more than a decade. Growth in developing economies has ratcheted down for three decades—from 6 percent annually in the 2000s to 5 percent in the 2010s—to less than 4 percent in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5 percent in the 2000s to about 4.5 percent in the 2010s—to less than 3 percent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels.”
According to the GEP, nearly 60% of developing economies will see lower growth this year, averaging 3.8% in 2025 and 3.9% in 2026 and 2027. “That is more than a percentage point lower than the average of the 2010s,” the release noted.
Low-income countries are expected to grow 5.3% this year—stronger than the developed economies, but still 0.4% lower than the World Bank’s forecast at the start of 2025. “Tariff increases and tight labor markets are also exerting upward pressure on global inflation, which, at a projected average of 2.9 percent in 2025, remains above pre-pandemic levels,” the release noted.
In the full GEP report, the World Bank noted that the economic slowdown and ongoing trade disruptions have depressed commodity prices, but this will boost demand and prices for precious metals like platinum, gold, and silver.
“Commodity prices have fallen since February, largely owing to weaker growth prospects amid increased trade barriers and policy uncertainty (figure 1.4.A),” they wrote. “Largely reflecting these movements, annual average commodity prices are expected to decline by 10 percent in 2025 (figure 1.4.B).”
“In 2026, commodity prices are projected to soften further, by 6 percent, as production of some energy and metals commodities expands and supply constraints on several agricultural commodities ease,” the GEP said. “Thereafter, commodity prices are projected to edge up as global growth continues to recover, supporting commodity consumption. Risks to the commodity price projections are tilted to the downside, as a renewed escalation of trade tensions between major economies could further weaken global trade and investment, undermining commodity demand.”
The World Bank noted that base and industrial metals prices fell sharply in early April as global growth prospects deteriorated, but partially recovered in the following weeks as trade tensions cooled.
“From earlier in the year, copper and aluminum prices were bolstered by the front-running of prospective tariff increases, with U.S. aluminum prices substantially exceeding the global benchmark,” they wrote. “In all, the metals index is projected to drop by 5 percent in 2025 and drift lower in 2026 before stabilizing. Prices for most base metals are set to decline this year, reflecting trade-related headwinds to global manufacturing.”
But the World Bank projects that precious metals will see strong demand – and significant price growth – in 2025 and beyond.
“The precious metals price index—reflecting principally gold but also silver and platinum—is projected to buck the broader trend, increasing by more than 30 percent in 2025,” the GEP noted. “Annual average gold prices are expected to reach a record high this year, supported by safe-haven flows, before plateauing in 2026-27.”
