Washington (AP) – President Donald Trump Trade wars. According to the World Bank’s Tuesday report, economic growth in the US and globally is expected to decline this year.
Although not naming Trump, the 189-member lender noted “a significant rise in trade barriers” and forecasted that the US economy (the largest in the world) would grow at a slower pace of 1.4%, same as this year. 2024 (2.8%). This represents a downgrade from the US growth forecast for 2025 issued in January.
The institution also reduced global growth predictions this year by 0.4 percentage points. The global economy is now projected to expand by only 2.3% in 2025, down from 2.8% in 2024.
World Bank’s chief economist commented that the global economy has missed the chance for a “soft landing” in the latest version of the biannual World Economic Outlook Reports.
The US economic outlook remains uncertain due to Trump’s erratic and aggressive trade policies, including a 10% tax on imports from nearly every country, which raises costs for Americans and invites retaliatory measures from other nations.
China’s economic growth is anticipated to slow from 5% in 2024 to 4.5% this year, with projections for next year at 4%. The world’s second-largest economy is facing challenges from the tariffs imposed by Trump, a downturn in its real estate market, and an aging workforce.
For the 20 European countries that use the euro, growth is expected to be just 0.7% this year, a decrease from the already sluggish 0.9% in 2024. Trump’s tariffs are likely to negatively affect European exports, and his unpredictable approach to trade – such as announcing, halting, and introducing new tariffs – has generated uncertainty that hampers business investments.
India is projected to remain the fastest-growing major economy, with an expected growth rate of 6.3% this year, although this is down from 6.5% in 2024, and a revised forecast of 6.7% for 2025 from the bank in January. In Japan, economic growth is anticipated to pick up this year, moving from a decline of 0.2% in 2024 to a 0.7% decrease this year, which is significantly lower than the 1.2% growth projected by the World Bank in January.
The World Bank aims to alleviate poverty and improve living standards by offering subsidies and discounted loans to struggling economies.
Just last week, another international organization focused on fostering global prosperity, the Economic Co-operation and Development Agency, downgraded its forecast for the US and world economies.
Source: apnews.com