Latest news with #GlobalEconomicProspects
Yahoo
24 minutes ago
- Business
- Yahoo
Citing trade wars, the World Bank sharply downgrades global economic growth forecast to 2.3%
WASHINGTON (AP) — President Donald Trump's trade wars are expected to slash economic growth this year in the United States and around the world, the World Bank forecast Tuesday. Citing 'a substantial rise in trade barriers'' but without mentioning Trump by name, the 189-country lender predicted that the U.S. economy – the world's largest – would grow half as fast (1.4%) this year as it did in 2024 (2.8%). That marked a downgrade from the 2.3% U.S. 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,' Gill wrote. 'Without a swift course correction, the harm to living standards could be deep.'' America's economic prospects have been clouded by Trump's erratic and aggressive trade policies, including 10% taxes — tariffs — on imports from almost every country in the world. These levies drive up costs in the U.S. and invite retaliation from other countries. The Chinese economy is forecast to see growth slow from 5% in 2024 to 4.5% this year and 4% next. The world's second-largest economy has been hobbled by the tariffs that Trump has imposed on its exports, by the collapse of its real estate market and by an aging workforce. The World Bank expects the 20 European countries that share the euro currency to collectively grow just 0.7% this year, down from an already lackluster 0.9% in 2024. Trump's tariffs are expected to hurt European exports. And the unpredictable way he rolls them out — announcing them, suspending them, coming up with new ones — has created uncertainty that discourages business investment. India is once again expected to the be world's fastest-growing major economy, expanding at a 6.3% clip this year. But that's down from 6.5% in 2024 and from the 6.7% the bank had forecast for 2025 in January. In Japan, economic growth is expected to accelerate this year – but only from 0.2% in 2024 to a sluggish 0.7% this year, well short of the 1.2% the World Bank had forecast in January. The World Bank seeks to reduce poverty and boost living standards by providing grants and low-rate loans to poor economies. Another multinational organization that seeks to promote global prosperity — the Organization for Economic Cooperation and Development — last week downgraded its forecast for the U.S. and global economies. Paul Wiseman, The Associated Press Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
AU Financial Review
an hour ago
- Business
- AU Financial Review
World Bank slashes global growth forecast as trade tensions bite
Washington | The World Bank on Tuesday (Wednesday AEST) slashed its global growth forecast for 2025 by 0.4 percentage point to 2.3 per cent, saying that higher tariffs and heightened uncertainty posed a 'significant headwind' for nearly all economies. In its twice-yearly Global Economic Prospects report, the bank lowered its forecasts for nearly 70 per cent of all economies – including the United States, China and Europe, as well as six emerging market regions – from the levels it projected just six months ago before US President Donald Trump took office. Reuters
Yahoo
an hour ago
- Business
- Yahoo
Citing trade wars, the World Bank sharply downgrades forecast for global economic growth to 2.3%
WASHINGTON (AP) — President Donald Trump's trade wars are expected to slash economic growth this year in the United States and around the world, the World Bank forecast Tuesday. Citing 'a substantial rise in trade barriers'' but without mentioning Trump by name, the 189-country lender predicted that the U.S. economy – the world's largest – would grow half as fast (1.4%) this year as it did in 2024 (2.8%). That marked a downgrade from the 2.3% U.S. 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,' Gill wrote. 'Without a swift course correction, the harm to living standards could be deep.'' America's economic prospects have been clouded by Trump's erratic and aggressive trade policies, including 10% taxes — tariffs — on imports from almost every country in the world. These levies drive up costs in the U.S. and invite retaliation from other countries. The Chinese economy is forecast to see growth slow from 5% in 2024 to 4.5% this year and 4% next. The world's second-largest economy has been hobbled by the tariffs that Trump has imposed on its exports, by the collapse of its real estate market and by an aging workforce. The World Bank expects the 20 European countries that share the euro currency to collectively grow just 0.7% this year, down from an already lackluster 0.9% in 2024. Trump's tariffs are expected to hurt European exports. And the unpredictable way he rolls them out — announcing them, suspending them, coming up with new ones — has created uncertainty that discourages business investment. India is once again expected to the be world's fastest-growing major economy, expanding at a 6.3% clip this year. But that's down from 6.5% in 2024 and from the 6.7% the bank had forecast for 2025 in January. In Japan, economic growth is expected to accelerate this year – but only from 0.2% in 2024 to a sluggish 0.7% this year, well short of the 1.2% the World Bank had forecast in January. The World Bank seeks to reduce poverty and boost living standards by providing grants and low-rate loans to poor economies. Another multinational organization that seeks to promote global prosperity — the Organization for Economic Cooperation and Development — last week downgraded its forecast for the U.S. and global economies.
Yahoo
an hour ago
- Business
- Yahoo
World Bank: Economy set for worst run since 2008 outside of recessions
Trade frictions and policy uncertainty, notably linked to US tariffs, are expected to drive global growth down this year to its slowest pace since 2008 outside of outright global recessions. That's according to the World Bank's latest Global Economic Prospects report, released on Tuesday. Although the world was nearing a post-pandemic 'soft landing' just six months ago, the bank noted that 'the world economy today is once more running into turbulence'. The group cut growth forecasts in nearly 70% of all economies. When it comes to global expansion, this total is projected to slow to 2.3% in 2025, nearly half a percentage point lower than the rate expected at the start of the year. A global recession is not on the cards, but if forecasts for the next two years materialise, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s — according to the World Bank. Aside from trade and policy uncertainty, barriers to global growth include rising geopolitical tensions, increasingly common extreme climate events, and slower-than-expected growth in major economies, which risks global spillovers. Related Slower growth looms over Eastern Europe as reform urgency rises Developing economies have greater challenges ahead, warns World Bank '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% annually in the 2000s to 5% in the 2010s — to less than 4% in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5% in the 2000s to about 4.5% in the 2010s—to less than 3% in the 2020s. Investment growth has also slowed, but debt has climbed to record levels.' Progress by emerging market and developing economies (EMDEs) in closing per capita income gaps with advanced economies and reducing extreme poverty is also anticipated to weaken, said the World Bank. The group called for more support to address long-standing challenges, including the effects of climate change. Across EMDEs, governments should focus on containing inflation risks and strengthening fiscal resilience by reprioritising spending, said Tuesday's report. Global growth could rebound faster than expected if major economies are able to mitigate trade tensions, added the World Bank. The analysis finds that if today's trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, global growth would be 0.2 of a percentage point stronger on average over the course of 2025 and 2026.
The Print
2 hours ago
- Business
- The Print
World Bank retains India's FY26 growth at 6.3 pc amid global uncertainties
According to the World Bank's latest Global Economic Prospects report, heightened trade tensions and policy uncertainty are expected to drive global growth down this year to its slowest pace since 2008 outside of outright global recessions. In April, the World Bank had lowered India's growth projection for 2025-26 to 6.3 per cent from its January forecast of 6.7 per cent. Washington, Jun 10 (PTI) World Bank on Tuesday pegged India's economic growth projection at a lower level of 6.3 per cent for 2025-26 due to pressure on exports emanating from global uncertainties, though the country will remain the fastest growing major global economy. The global growth has been projected to slow to 2.3 per cent in 2025, nearly half a percentage point lower than the rate that had been expected at the start of the year. The turmoil has resulted in growth forecasts being cut in nearly 70 per cent of all economies—across all regions and income groups, it said. After unexpectedly weak growth of 6 per cent in 2024, activity in South Asia (SAR) is decelerating amid rising global trade barriers, heightened policy uncertainty, and financial market volatility, it said. Regarding India, the report said the growth moderated in FY2024-25 (April 2024 to March 2025), partly reflecting a deceleration in industrial output growth. However, growth in construction and services activity remained steady, and agricultural output recovered from severe drought conditions, supported by resilient demand in rural areas. 'India is projected to maintain the fastest growth rate among the world's largest economies, at 6.3 per cent in FY2025-26,' it said. Nevertheless, the forecast for growth in FY2025-26 has been downgraded by 0.4 percentage point relative to January projections, with exports dampened by weaker activity in key trading partners and rising global trade barriers, the World Bank said. World Bank expects China to grow at 4.5 per cent in 2025 and 4 per cent next year. Last week, the Reserve Bank on India retained GDP growth projections for the current fiscal at 6.5 per cent, saying the Indian economy presents a picture of strength, stability and opportunity in the backdrop of global uncertainty. World Bank further said investment growth is expected to slow, primarily reflecting a surge in global policy uncertainty. In FY2026-27 and FY2027-28, growth is expected to recover to 6.6 per cent a year, on average, partly supported by robust services activity that contributes to a pickup in exports. The report projects India's 2026-27 growth at 6.5 per cent, down 0.2 percentage point from January estimates. The report further said growth in SAR is expected to slow to 5.8 per cent in 2025 as rising trade barriers weigh on exports, dampen business confidence, and weaken investment in the region. Growth is then set to increase to 6.2 per cent a year, on average, in 2026-27, supported by improving activity in India and accelerations elsewhere, broadly consistent with the region's potential growth estimates. The report said 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. It also said global growth could rebound faster than expected if major economies are able to mitigate trade tensions – which would reduce overall policy uncertainty and financial volatility. The analysis finds that if today's trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, global growth would be 0.2 percentage point stronger on average over the course of 2025 and 2026. The report argues that in the face of rising trade barriers, developing economies should seek to liberalize more broadly by pursuing strategic trade and investment partnerships with other economies and diversifying trade—including through regional agreements. Given limited government resources and rising development needs, policymakers should focus on mobilizing domestic revenues, prioritizing fiscal spending for the most vulnerable households, and strengthening fiscal frameworks. PTI NKD CS MR MR This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
