Washington - Saba:
The World Bank on Tuesday lowered its global economic growth forecast for 2025 by 0.4 percentage points, to 2.3%, noting that escalating trade tensions and increased tariffs represent a "significant obstacle" for nearly all economies, both advanced and emerging.
The bank explained that it lowered its forecasts for approximately 70% of the world's economies, including the United States, China, the European Union, and six emerging market regions, compared to forecasts issued six months ago, before Donald Trump returned to the White House.
The report indicated that the Trump administration raised average US tariffs from less than 3% to approximately 16%, the highest level in a century, prompting responses from China and other countries and contributing to the destabilization of the global trading system.
The World Bank confirmed that it does not expect a global recession, but warned that the current growth rate will be the weakest outside of recessions since the 2008 global financial crisis.
According to the report, global GDP growth will average only 2.5% by 2027, the slowest pace for any decade since the 1960s.
According to the new forecast, global trade is expected to grow by 1.8% in 2025, compared to 3.4% in 2024, nearly a third of the 5.9% level recorded in the first decade of the 21st century.
The report added that these estimates are based on tariffs in place until the end of May, including a 10% US tariff on most imports.
The forecasts do not include the new tariffs announced by Trump in April, which were postponed until July 9 to allow time for negotiations.
The bank expects global inflation to reach 2.9% in 2025, indicating that it will remain above pre-COVID-19 levels.
The bank also warned that any additional 10% increase in US tariffs, along with similar retaliatory measures from other countries, could reduce projected global growth in 2025 by an additional 0.5 percentage points.
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