The World Bank’s June 10th press release – Global Economy Set for Weakest Run Since 2008 Outside of Recessions – projects world output to expand by only 2.3 per cent in 2025. That projection is the lowest level in a non-recession year since 2008. Nearly 70 per cent of economies, across all regions and income groups, have had growth forecasts downgraded. If this pace continues, the average global growth rate in the 2020s would be the slowest since the 1960s.
Of course, the World Bank frames its downgrade of 2025 growth as a product of tariff wars and “policy uncertainty,” urging yet more trade liberalisation to revive the engine. Marxists interpret the exact figures as a continuation of the stagnation that has plagued capitalism – particularly since the 2008 crisis, but also in the preceding period, when asset bubbles obscured underlying problems.
During the post-war period, capitalist economies such as the U.S., the U.K., France, Germany, and Japan often experienced annual GDP growth rates of between 4 and 6 per cent. Since the 1980s, and especially after 2008, growth has averaged 2 per cent or lower in many advanced capitalist economies.
What difference does a few per cent make? GDP growth of 2 per cent or less tends to be entirely captured by capital owners. There are numerous reasons for this, but one is that low-growth periods often lead to low-interest rate policies and quantitative easing by central banks, which boost asset prices (stocks and bonds). Low growth works against raising wages – as capitalists in a low-growth environment are more likely to resist profit margin erosion – and also against lowering unemployment – since capitalists are less likely to invest under conditions of expected low returns.
There is also the matter of compound growth: a country growing at 3.5 per cent annually will double its economy in 20 years; at 1 per cent, it takes 70. That has significant implications for living standards and state power.
The current trajectory seems less an aberration than the new normal. Even the bourgeois business press recognises the stagnation and is asking why capitalists aren’t innovative anymore (The Rising Resistance to Creative Destruction, Financial Times, June 15th 2025). Mainstream economists, such as Larry Summers- a former adviser to Clinton and Obama – speak of “secular stagnation.”
Yet whereas Summers sees stagnation as a policy or demographic issue (ageing populations, low investment, weak demand), Communists point to the contradictions of capital accumulation: the overaccumulation of capital that cannot find profitable investment outlets, and realisation crises whereby capitalists produce more than the market can absorb profitably. “Secular stagnation” may be capitalism hitting its limits.
Resuscitating growth with another round of trade liberalisation, as the World Bank recommends, seems unlikely to address the underlying problems. Capitalist social relations can, of course, prevail under conditions of an average tendency toward stagnation. Yet, while capitalism chases profit, not growth, it remains dependent on growth for its profits: stock markets are built on growth projections; interest-bearing loans assume expansion to be repaid; states need tax revenue; and populations need employment. Without growth, competition for profit becomes zero-sum, cut-throat, and crisis-prone – although capitalist monopolisation may temporarily retard this pressure.
Less growth may result in the depletion of fewer natural resources, potentially leading to better environmental outcomes. But that view is short-sighted, as responding effectively to climate change will bring its own kind of economic growth. Marxists are not for having less of an economy and making people poorer, so much as for having a different economy – based on planned, sustainable, and balanced growth. Without a pivot in that direction, the 2.3 per cent world of 2025 may prove to be the high-water mark of capitalism’s terminal drift.
