Latest news with #TheWorldBankGroup
CNBC
2 days ago
- Business
- CNBC
World Bank sharply cuts global growth outlook on trade turbulence
The World Bank sharply cut its global economic growth projections Tuesday, citing disruption from trade uncertainty in particular. It now expects the global economy to expand by 2.3% in 2025, down from an earlier forecast of 2.7%. "This would mark the slowest rate of global growth since 2008, aside from outright global recessions," the Bank said in its Global Economic Prospects report. Trade uncertainty, especially, has weighed on the outlook, the World Bank suggested. "International discord — about trade, in particular — has upended many of the policy certainties that helped shrink extreme poverty and expand prosperity after the end of World War II," Indermit Gill, senior vice president and chief economist of The World Bank Group, said in the report. It also cut its 2025 growth forecast for the U.S. by 0.9 percentage points to 1.4%, and reduced its euro area GDP expectations by 0.3 percentage points to 0.7%. The Bank noted that an escalation of trade tensions could push growth even lower, but the picture could improve if major economies strike lasting trade agreements. "Our analysis suggests that if today's trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, 2025, global growth could be stronger by about 0.2 percentage point on average over the course of 2025 and 2026," Gill said. The U.S. and many of its trading partners are currently in negotiations after U.S. President Donald Trump imposed steep tariffs on numerous countries in April. This week, for example, the U.S. and China are meeting in London after the two countries agreed to temporarily reduce levies following talks in May. Negotiations are also still ongoing between the U.S. and European Union with less than a month to go before previously announced tariffs are set to come into full force. In cutting its global growth expectation, the World Bank follows various other bodies, including the Organisation for Economic Co-operation and Development, which also cited the fallout from trade and tariff-related uncertainty as the key factor. The OECD said earlier this month that it was expecting global growth to slow to 2.9% in 2025, also caveating its forecast with the potential for future tariff developments. It had previously forecast global growth of 3.1% this year.
Mint
2 days ago
- Business
- Mint
Trade tensions cloud global growth, India FY26 outlook unchanged from April: World Bank
New Delhi: The global economy faces significant headwinds from escalating trade tensions and policy uncertainty, leading to a downgrade in prospects across most nations, the World Bank said on Tuesday. as it cut its global growth projection to 2.3% for the year. In its "Global Economic Prospects-June 2025" report, the bank kept India's growth forecast unchanged at 6.3% for FY26, consistent with its April prediction in the South Asia update. This is 0.4 percentage points below January's projections, as the Bank anticipates weaker activity among key trading partners and rising global trade barriers to curb Indian exports. It expects the Indian economy to grow slightly faster at 6.5% in FY27 and 6.7% in FY28. Globally, the World Bank has revised its economic growth projections, now expecting a slowdown to 2.3% in 2025 (0.4 percentage points below the January forecast), 2.4% in 2026 (0.3 percentage points lower) and 2.6% in 2027. It presents India's economic data on a fiscal year basis, in contrast with its calendar year reporting for other economies. "Only six months ago, a soft landing appeared to be in sight: the global economy was stabilizing after an extraordinary string of calamities both natural and man-made over the past few years," said Indermit Gill, Senior Vice President and Chief Economist at The World Bank Group. "That moment has passed. The world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep," he added. In April, its sister institution the International Monetary Fund cut India's FY26 growth forecast to 6.2% from an earlier estimate of 6.5% citing trade risks from the US global tariff war. On 2 April, US President Donald Trump announced a 27% reciprocal tariff on Indian goods, citing India's average 52% duty on US imports, as part of a broader strategy to address trade imbalances and protect domestic industries. However, the US has temporarily reduced the tariff to 10%, providing relief to India and other trading partners. The global economy faces severe headwinds from a complex interplay of geopolitical conflicts and escalating trade barriers. The ongoing war in Ukraine, alongside numerous other regional skirmishes, continues to disrupt critical supply chains, fuel inflationary pressures, and erode business confidence worldwide. This widespread instability, exacerbated by a proliferation of protectionist trade measures, is contributing to a significant deterioration in global economic prospects and poses a growing threat to living standards across the globe. India's 6.3% projection for FY26 is primarily due to anticipated dampening effects on exports from weaker activity in key trading partners and rising global trade barriers. "In the next two fiscal years, starting in FY2026/27 (FY27), growth is expected to recover to 6.6% a year, on average, partly supported by robust services activity contributing to a pickup in exports," it added. The World Bank report emphasized that global risks are intensifying, with the spectre of further trade barriers and heightened policy uncertainty looming large. It also highlighted concerns about higher-than-expected global inflation, which could lead to tighter financial conditions, potentially weakening regional currencies and spurring capital outflows. Further downside risks to South Asia, according to the report, include the possibility of surging violence and social unrest, alongside more frequent and severe natural disasters across the globe. "Downside risks to the outlook predominate, including an escalation of trade barriers, persistent policy uncertainty, rising geopolitical tensions, and an increased incidence of extreme climate events," Gill said. "Conversely, policy uncertainty and trade tensions may ease if major economies succeed in reaching lasting agreements that address ongoing trade disputes," he said adding that for emerging market and developing economies (EMDEs), there has been a decline in their ability to narrow per capita income gaps with richer countries, boost job creation, and reduce extreme poverty. In its latest report, the World Bank projects a notable slowdown for advanced economies, with growth expected to decelerate to 1.2% in 2025, 1.4% in 2026, and 1.5% in 2027. The US is now projected to see its economic growth slow to 1.4% in 2025, before modestly picking up to 1.6% in 2026 and 1.9% in 2027, according to the report. These revised figures represent a notable 0.9 percentage point decline for 2025 and a 0.4 percentage point reduction for 2026 compared with the Bank's January estimates, reflecting broader global economic challenges. Europe's economic growth is now projected to slow, with the World Bank forecasting expansions of 0.7% in 2025, 0.8% in 2026, and 1% in 2027. These figures represent a significant downward revision from January estimates, with the 2025 forecast cut by 0.3 percentage points and the 2026 outlook reduced by 0.4 percentage points. Even as advanced economies face headwinds, emerging markets and developing economies are collectively projected to show more robust, albeit slightly tempered, growth. The World Bank forecasts these nations will expand by 3.8% in both 2025 and 2026, inching up to 3.9% in 2027. Within this group, China's growth is expected to moderate, with projections of 4.5% in 2025, 4% in 2026, and 3.9% in 2027, reflecting a broader trend of maturing economies. "The outlook largely hinges on the evolution of trade policy globally. Growth could turn out to be lower if trade restrictions escalate or if policy uncertainty persists, which could also result in a build-up of financial stress. Other downside risks include weaker-than-expected growth in major economies with adverse global spillovers, worsening conflicts, and extreme weather events," the report said. "On the upside, uncertainty and trade barriers could diminish if major economies reach lasting agreements that address trade tensions," it added.
Zawya
01-05-2025
- Business
- Zawya
Ndiamé Diop Appointed as World Bank Vice President for Eastern and Southern Africa
The World Bank has appointed Ndiamé Diop as the new Vice President for Eastern and Southern Africa, effective today. In line with the World Bank's efforts to be closer to clients and enhance service delivery, Diop will be based in Nairobi, Kenya. As Vice President, he will oversee an active regional portfolio of almost 400 projects worth over $76 billion and an extensive program of cutting-edge analytical work, technical assistance, and policy advice across 26 countries. Under Diop's leadership, the World Bank will continue to work closely with clients and partners to advance strategic priorities in the region, including job creation, energy access, digital connectivity, regional integration, health, water and sanitation, and education — all of which underpin poverty reduction and spur economic transformation in the region. Diop will also guide efforts to address the drivers of fragility, conflict, and violence to build more resilient communities. With over 25 years of experience working across East Asia, the Middle East, North Africa, South Asia and Sub-Saharan Africa, Diop brings a global perspective and a strong track record of achieving results and impact, including tripling World Bank financing to the Philippines to support economic reforms and improve outcomes in various sectors. In his most recent role as Country Director for Nigeria, Diop led the World Bank's largest portfolio in Africa ($17 billion) and shaped the future Nigeria program to support faster economic growth through policy reforms, digital broadband connectivity, firms' access to finance and agribusiness growth. He holds a Ph D in Economics and has published extensively in peer-reviewed journals and books on topics such as fiscal policy and growth, monetary policy and inflation, natural resource abundance, Dutch disease, and economic diversification. He is fluent in French, English, and Wolof and possesses an intermediate level fluency of Arabic and Bahasa (Indonesian). Diop succeeds Victoria Kwakwa, who retired on March 31, 2025. Distributed by APO Group on behalf of The World Bank Group.
