World Bank warns the global economy is on track for its worst decade in 60 years.
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For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com.
I am Leon Gettler. My job is to review and monitor the week’s news in business, finance and economics. I bring it all to you, every week.
This is episode number 18 in our series for 2025 and today’s date is Friday June 13
First, I’ll be talking to I’ll be talking to therapist, lawyer, mediator and changes to personality expert Bill Eddy, the co-founder and Director of Innovation at the High Conflict Institute, who will tell us how to stop workplace bullies before they start.
And I’ll be talking to AMP Capital chief economist Shane Oliver about how the market is going in response to Trump’s tariffs, Australia’s inflation rate, the RBA and how to fix our low productivity.
But first, let’s talk to Bill Eddy.
So what’s happening in the news?
Despite the weakening outlook, the global economy is not expected to fall into a recession, the World Bank said. However, the trade tension is setting the stage for the weakest decade of growth since the 1960s. Economic development in many of the poorest parts of the world has come to a standstill. Expansion in global output is forecast to slow to 2.3% in 2025 from 2.8% last year, the World Bank said in its Global Economic Prospects report. That is down from the 2.7% growth that it forecast in January. “The world economy today is once more running into turbulence,” Indermit Gill, chief economist of the World Bank, wrote in the report. “Without a swift course correction, the harm to living standards could be deep.” The country facing the biggest downgrade from the World Bank’s projections in January is the United States, which initiated the trade fights. U.S. output is poised to slow to 1.4% this year, from 2.8% in 2024. That is nearly a full percentage point below the January estimate. “The rise in trade barriers, heightened uncertainty and the spike in financial market volatility are set to weigh on private consumption, international trade and investment,” the World Bank report said. It added that investment was likely to cool “due to record-high uncertainty, the rise in financing costs, and reduced domestic and external demand.” The United States enacted across-the-board 10% tariffs on imports and 50% tariffs on steel and aluminum imports this year. It has also threatened “reciprocal” tariffs on dozens of trading partners and raised tariffs on Chinese imports to 145% before lowering them to allow for trade negotiations. The tariffs have pushed the average effective U.S. tariff rate to the highest level in a century. The World Bank released its new forecasts as officials from the United States and China held their second day of trade talks in London. In recent months, the world’s two largest economies have each imposed export controls limiting the other’s access to a broad range of items critical to high-technology and military applications. A temporary trade truce reached last month between the countries had shown signs of faltering. The latest round of discussions are aimed at preventing trade tensions from escalating again. The World Bank estimates that if global tariff rates were cut in half, global growth would be 0.2 percentage points stronger over the next two years. It argues that developing countries, which have some of the highest tariffs in the world, should also lower their trade barriers to help stimulate economic growth. “Economic cooperation is better than any of the alternatives — for all parties,” Mr. Gill said. Overall, growth in emerging markets and developing economies is expected to continue to outpace expansion in advanced economies this year. But growth remains relatively sluggish in low-income countries, where expansions are not happening fast enough to make up for economic losses that were incurred during the pandemic and its aftermath.
Donald Trump’s gutting of Harvard University’s funding is set to have a ripple effect on Australia’s research into multiple sclerosis at a critical time for studies into the debilitating disease that impacts tens of thousands of Australians. The US president last month cancelled federal funding for the university’s school of public health as part of his war on the Ivy League institution, halting progress towards medical breakthroughs on a range of diseases. But the war has already hit hard the T.H. Chan School of Public Health, which relies more heavily than other sections of Harvard on government support. Funding for its world-renowned research into MS has halted, with knock-on effects for the global research community, including Australia, that collaborates with Harvard. “We are professionals, but this is devastating. This is really difficult for us and many other areas of medical research,” said Dr Julia Morahan, head of research for MS Australia, who oversees grant allocations for local studies. “The work that Harvard does generally and especially at the Chan School is incredibly impactful,” she said. “It is internationally recognised but also globally connected and this will have implications for the international collaborations that we have set up in MS.” The freeze comes as the number of Australians contracting the disease is rising, but the reasons remain unclear. More than 33,300 people live with MS, a debilitating illness that for some is the equivalent of end-stage cancer. Almost 3 million people have been diagnosed worldwide. MS Australia has allocated 35 new research grants this year for local scientists who will continue to search for causes, preventions and treatments, and other research work is ongoing. But Australia and the rest of the world have long benefited from Harvard’s collaborative work.
The Albanese government will use a productivity summit to create consensus around a new economic agenda that includes tax reform, deregulation and streamlined major project approvals. And it has ruled out entertaining any changes to its industrial relations laws. Business and employer groups cautiously welcomed the initiative which would bring together business, union and civic leaders in August but warned the government would need to pay heed to their ideas. The groups felt used by the government at the Jobs and Skills summit in 2022 following the election of the government. All that produced was a raft of changes to re-regulate the IR system. Business did not agree with that and argued it would stifle productivity. The Australian Industry Group said it would use the summit to push hard for meaningful reforms and measures to pull Australia out of its productivity malaise. The Business Council of Australia said policies driving business investment must be at the core of the agenda. It cited red tape reduction, faster approvals on major projects, harnessing the potential of AI, advancing research and development, broad tax reform, unlocking more trade and investment and delivering the energy transition. Business is going into the summit with eyes wide open. Business is still smarting from the 2022 exercise when it showed up only to discover that the outcomes of the summit – a significant re-regulation of industrial relations – was the preordained outcome, and it was there supposedly to lend it credibility. Truth be told, the government doesn’t need a summit to tell it what to do on productivity. The former Coalition government, under an initiative of Scott Morrison, commissioned at least two sizeable reports from the Productivity Commission as to the scope of the problem and what to do about it. That died with the pandemic. Another was commissioned by former Treasurer Josh Frydenberg. That, too, died in a hole, before Labor and Jim Chalmers came along and instigated a whole new process of their own. Chalmers has asked the Productivity Commission to come up with a report – yes, to fix productivity. That report will be released in August, yes, at the same time the government will effectively replicate its Jobs and Skills Summit from 2022 and invite business, unions and others for a jamboree on productivity.
The Pilbara resources giants might be steeling themselves for industrial action in iron ore’s heartland, but their fly in, fly out workers have something else playing on their minds – getting a good night’s sleep.At least that’s the findings of what is arguably the most expansive study of FIFO work in the country, or as its lead author, Monash University’s Jack Tooley, describes it, “like a ‘state of the nation’ for FIFO camps”. There are now some 70,000 people on FIFO sites, predominantly in isolated mining locations in Western Australia and Queensland, working long hours in often arduous conditions. They could be there a few days; sometimes workers are on site for several weeks. An environment where staff live cheek by jowl for long periods has, in turn, created problems. The stress of being away from family and friends has contributed to increased rates of depression, drug use and even suicide. The Monash University researchers are conducting rolling surveys to determine the most pressing work camp issues affecting FIFO workers, and how to improve onsite living conditions and reduce staff turnover. Tooley says the initial findings show that the inability to get a good night’s sleep after a 12-hour shift was the top concern. “Sound levels and noise insulation is by far the most important thing to FIFO workers,” Tooley says.
Coles will retool its health, beauty and household categories as Australia’s second-biggest supermarket tries to claw back some of the estimated $400m in sales lost to a new generation of grocery rivals such as Chemist Warehouse, Amazon and Bunnings. This is expected to precede a long list of changes. Recently appointed general manager for health and home, Leanne White, said it was vital Coles introduced a “step change” into the way it manages these categories in an ever-broadening and competitive space. This intensification of competition was reflected in the ranks of non-supermarket retailers such as Chemist Warehouse and Amazon now pitching health, beauty and home products to their customers. Ms White conceded Coles had been deploying a strategy that didn’t fit the new dynamics of selling bathroom cabinet staples like sunscreen and laundry essentials. “We have all been working with a real supermarket lens on how to execute our offer and potentially have not lifted our eyes enough on the broader market set,” she told suppliers. “We have also lost sight of the importance of health and home,” she added. “The reality is we have stood still … we really, really need to lift our eyes.” Coles wants to get closer to these suppliers, and for that reason has requested their fiscal 2026 promotional calendars with maximum notice. This will allow it to better map out its own campaigns for the year, and mitigate the threat of Chemist Warehouse, other pharmacy chains such as Wesfarmers’s Priceline, and online marketplaces like Temu, Amazon. There is no specific timeline for implementing this enhanced planning approach.
The financial cop Austrac has been drafted to help fight tobacco wars, using its cutting edge intelligence and monitoring systems to track hundreds of millions of dollars in cash generated by crooks. Austrac is putting real-estate transactions, privately owned ATMs, cryptocurrencies, lawyers and car dealers under scrutiny to track the large amount of cash generated by illegal tobacco sales which can help tip off police. Intensive efforts by Austrac in cracking down on money laundering across banks, bookmakers and casinos over the past decade have now largely closed off those avenues to organised crime, forcing them to find other ways to get dirty cash into the financial system. Now, the agency has been tapped to provide financial tracing support to state and federal police efforts to battle the surge in illegal tobacco trade, that users call chop-chop. Victoria has borne the brunt with more than 100 shop fires linked to the tobacco turf war. That fight is rapidly spreading into other states. Austrac chief executive Brendan Thomas warned about the growing sophistication of international crime networks including operators across Asia, with Australia being targeted by specialist laundering syndicates whose sole job is to clean cash for a fee. “What we’re seeing in Australia is the growth of organised crime and particularly organised money laundering. They’ll come, and they’ll say, ‘we’ll launder your $20m, and we’ll take this proportion as a fee’. Then they’ll look for ways in which they can launder the money through the economy in any way they can find.”
New York-based distressed debt investor Anchorage Capital Advisors is among the parties that submitted a proposal to buy Rex which collapse last year. This is the same group that played leading roles in the recapitalisations of Alinta Energy, law firm Slater & Gordon, forestry business Gunns and radiology player I-MED before exiting Australia in 2021. This means long-haul sale process for Regional Express might be finally preparing to land, 10 months after the airline collapsed amid a bitter boardroom feud and a misplaced ambition to compete against Qantas and Virgin Australia by flying popular capital city routes. Binding bids for the carrier, better known as Rex, were due last week after administrator EY and its sale advisor Houlihan Lokey canvassed local and international buyers. The investment bank was hired in February, and is expected to declare the winning bidder within weeks. Rex’s administrator will have to convince the courts that it has found credible buyers – and not just tyre kickers – to get an extension to the looming June 30 deadline and complete the sale. The Albanese government has previously said it will consider taking ownership of the airline if a buyer doesn’t emerge by then. Bidders have been negotiating directly with the federal government, given it is a secured creditor and will have a meaningful say in the final deed of company arrangement. Bidders have carefully weighed what support the government could supply to the airline under its new owners. In addition to Anchorage, Perth-based HMC Group, the parent of Nexus Airlines, had considered submitting a bid. However, it is unclear is if it tabled a competing offer. Nexus flies a limited number of routes around Western Australia and has bid against Rex for some government-protected and subsidised services.
Consumer advocates say insurance companies are ripping off vulnerable customers with low-ball cash settlements to fund repairs on flood-damaged homes. Thousands of households in NSW and Queensland are still cleaning up after devastating floods in April and May. “We hear appalling stories about insurers pushing cash settlements onto customers who are clearly vulnerable,” says Financial Rights Legal Centre senior policy and advocacy officer, Drew MacRae. The centre runs the Insurance Law Service, a free legal advice line that receives more than 12,000 calls every year from customers of insurers. Concerns over final cash settlements – which involve policyholders being paid a lump sum to fix a property themselves, instead of the insurer arranging and covering the repairs – are one of the most common gripes. “These include offering low-ball cash settlements to elderly people, who aren’t able to manage the repairs,” MacRae said. “But a lot take the money, due to frustration dealing with insurers.” As the insurance industry deals with the fallout from Tropical Cyclone Alfred – and the more recent floods on the NSW mid north coast, which have triggered almost 2000 claims – other consumer advocates said that they too have concerns about cash settlement offers. Louise Hayes, the national co-ordinator for disaster recovery at Financial Counselling Australia, said the National Debt Helpline hears many complaints about cash settlement offers “not reflecting the work that needs to be done, and claimants being pressured to take them”. “Almost without exception, they involve customers in extremely vulnerable situations that insurers have failed to recognise,” Hayes said.
And that’s it for this week. And next week, I’ll be talking to Michael “Mike” Dallas-Petersen, an entrepreneur, father, and husband based in Summerland, British Columbia. He is also the founder of The Integrator Academy, a coaching program that teaches working professionals on how to start their own remote integrator business. It also helps online business owners scale, fix, or diagnose their online marketing and sales systems.
And I’ll be talking to independent economist Craig James about about what’s happening in the market next week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com
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Looking forward to the next episode of Talking Business.
