The World Bank in its regular forecast on Tuesday said that US President Donald Trump's trade wars are expected to slash economic growth this year in the United States and around the world.
Citing “a substantial rise in trade barriers" but without mentioning Trump by name, the 189-country lender predicted that the US economy – the world's largest – would grow half as fast (1.4 per cent) this year as it did in 2024 (2.8 per cent).
That marked a downgrade from the 2.3 per cent 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 per cent in 2025, down from 2.8 per cent 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 and added that without a swift course correction, the harm to living standards could be deep.
(With inputs from AP)