A perfect storm of risks is brewing for the world economy, with a new report identifying a “triple threat” of delayed tariff impacts, financial market instability, and damaging immigration policies. This dangerous combination is why the institution maintains a “dim” long-term outlook, despite upgrading 2025 growth to 3.2%.
The first element of the storm is the lingering impact of the trade wars. The report argues that the initial gust has passed, but the main force of the hurricane—a significant downturn in business investment—is still to make landfall. This is seen as a major drag on future growth.
The second element is the volatile atmosphere in financial markets. The report warns that “stretched valuations,” especially in the AI sector, have created a bubble of low pressure. A sudden “correction” could cause this to burst, triggering a sharp and widespread investment downturn.
The third element is the self-inflicted damage from restrictive immigration policies. The report sees this as a slow-moving but powerful current that is dragging down growth potential and creating inflationary whirlpools in key economies like the United States.
While the global economy is currently showing “unexpected resilience,” the report suggests it is sailing directly into this converging triple threat. For countries like the UK, which is already trying to navigate its own storm of high inflation, the prospect of a global perfect storm is a cause for serious concern.
Picture Credit: www.commons.wikimedia.org
