World Bank sharply downgrades forecast for global economic growth to 2.3%
US President Donald Trump's trade wars are expected to slash economic growth this year in America and around the world, the World Bank forecast.
Citing 'a substantial rise in trade barriers' but without mentioning Mr Trump by name, the 189-country lender predicted that the US economy – the world's largest – would grow half as fast (1.4%) this year as it did in 2024 (2.8%).
That marks a downgrade from the 2.3% US growth it had forecast back for 2025 back in January.
The bank also lopped 0.4 percentage points off its forecast for global growth this year. It now expects the world economy to expand just 2.3% in 2025, down from 2.8% in 2024.
In a forward to the latest version of the twice-yearly Global Economic Prospects report, World Bank chief economist Indermit Gill wrote that the global economy has missed its chance for the 'soft landing' – slowing enough to tame inflation without generating serious pain – it appeared headed for just six months ago.
'The world economy today is once more running into turbulence,' Mr Gill wrote.
'Without a swift course correction, the harm to living standards could be deep.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Independent
4 hours ago
- Irish Independent
Growing hope of trade deal to avoid tariffs between EU and US, says Tanaiste Simon Harris
Simon Harris, said the 'mood music' has improved in recent days and that he is more 'encouraged' following a discussion earlier today with Donald Trump's Trade Representative, Jamieson Greer. Last month Trump lashed out an EU negotiators and threatened a 50pc tariff from June 1 as punishment for 'our discussions with them going nowhere.' But a phone call with the European Commission President, Ursula von der Leyen two days later put discussions back on track and pushed the tariffs start date back to July. With that deadline approaching Minister Harris said: 'there isn't a day to lose' and while there is a 'way to go.. negotiations have now begun in earnest'. He said: 'What we need to find out in the days ahead, is there a landing zone that can work for everyone? And quite frankly, there has to be because this transatlantic trade agreement matters.' The EU and Ireland want to negotiate an outcome, he said 'and from my discussion with President Trump's trade representative, I think he wants that as well.' The Minister for Foreign Affairs and Trade said: 'The deadline for the pause in tariffs will run out in July so it is very important that people intensively engage, there isn't a day to lose here. "But I do now think that the mood music, in terms of trying to find a deal, to find agreement, is somewhat better than what it was days ago. The relationship is worth more than €1.4 trillion between the EU and US 'it cannot be snuffed at and therefore a solution has to be found,' he said. On Tuesday Minister Harris told Cabinet colleagues that he would urge the EU to exempt key sectors key to the Irish economy from any retaliatory tariffs should the current negotiations fail. These would include aviation, medical, agrifood and the equine industry. In a letter to the EU's negotiator, Maros Sefcovic, he also urged the trade commissioner to ensure that any retaliation against the US would not adversely impact the North. Although talks between the EU and US have intensified in recent days, the EU has been preparing a list of hundreds of US products worth some €95bn.
Irish Times
5 hours ago
- Irish Times
Tánaiste told Trump trade representative tariffs ‘threaten' US-Ireland relationship
Tariffs 'threaten' relations between America and Ireland and are bad for those on both sides of the Atlantic, the Tánaiste has told US trade representative Jamieson Greer. Speaking after a virtual meeting with Mr Greer, Simon Harris , who is also Minister for Foreign Affairs and Trade, said he will stay in touch with his Washington counterpart 'as we seek to bring this trade dispute to an end'. The meeting between the pair on Thursday was described as 'positive' and 'constructive' by the Irish side. A readout from the Office of the US trade representative is not yet available. The EU had been slated for a 20 per cent tariff under the reciprocal rates announced by US president Donald Trump in April. A temporary pause took the rate down to 10 per cent through July 8th. READ MORE In late May, Mr Trump expressed frustration with the pace of talks and threatened to raise the tariff rate to 50 per cent , although he later said he would hold off on the threat until July 9th . Thursday's discussion followed on from a meeting between Mr Harris and US commerce secretary Howard Lutnick in Washington in April. According to the Irish Department of Foreign Affairs, the two politicians on Thursday 'discussed recent trade developments, including a constructive exchange of views on the ongoing negotiations between the US and EU.' Mr Harris said he outlined to Mr Greer the 'hugely successful two-way economic relationship between the US and Ireland'. 'I explained how tariffs threaten this relationship and are bad for business, bad for consumers and bad for workers on both side of the Atlantic,' Mr Harris said. The Tánaiste said he assured Mr Greer of Ireland's 'commitment to supporting a mutually beneficial agreement that works for the US and the EU'. He welcomed Mr Greer's positive meeting with European commissioner for trade and economic security, Maros Sefcovic, in Paris last week. After the meeting with Mr Sefcovic, Mr Greer said the EU had provided the US with 'a credible starting point for discussions on reciprocal trade' and the discussion showed Washington 'a willingness by the EU to work with us to find a concrete way forward to achieve reciprocal trade'. The European Commission is preparing to navigate another round of trade talks with President Trump's administration. Last week, the EU threatened to speed up retaliatory measures against the US if President Trump follows through on his threat to impose a 50 per cent levy on steel and aluminium imports. The Irish Government has been lobbying the European Commission to try to keep important domestic sectors like aviation, medtech, agricultural feed and whiskey out of the transatlantic trade war.
Irish Examiner
5 hours ago
- Irish Examiner
Donald Trump 'wants trade deal with EU'
US president Donald Trump wants to reach a trade deal with the EU, Tánaiste Simon Harris has said. Mr Harris said there are now 'real and meaningful' trade talks underway between the EU and US, after a call with US trade representative Jamieson Greer. While Mr Harris said the talks are now moving in a more positive direction, he believed there is still a 'way to go' before a deal is reached between the EU and US on trade. I think it's fair to say there is a way to go in relation to this, but I am encouraged by the fact that engagement has now begun in earnest between the EU and the United States. "I know from an EU perspective and from an Irish perspective, we want a negotiated outcome. From my conversation with president Trump's trade representative today, I think he wants that as well." 'What we need to find out in the days ahead, is there a landing zone that can work for everyone. Quite frankly, there has to be, because this transatlantic relationship matters.' Mr Harris acknowledged the deadline would run out next month, adding it was important for negotiators to 'intensely engage' and there 'isn't a day to lose here'. He added: I do now think the mood music, in terms of trying to find a deal, trying to find an agreement, is somewhat better than it was days ago. 'This will require the US and the EU to be really willing now to work to try find some common ground.' Mr Harris said the trading relationship between the EU and US was worth more than €1.4 trillion and this should not be 'snuffed at'. In an Irish readout of the call between Mr Harris and Mr Greer, the two had a 'constructive exchange of views' on the ongoing negotiations. Mr Greer recently met with EU Commissioner for trade, Maros Sefcovic, while Mr Harris travelled to Washington DC in recent months to meet with US commerce secretary Howard Lutnick. The ongoing negotiations come weeks after Mr Trump threatened to introduce a 50% tariff on all imports from the EU, after saying the talks between the two were 'going nowhere'. It led to a flurry of activity, with EU Commission president Ursula von der Leyen calling Mr Trump, before the US president opted to delay their introduction to allow for 'serious negotiations'. The deadline for negotiations to be completed are now July 9.
