The World Bank’s Global Economic Prospects report found that “international discord” surrounding trade has “upended many of the policy certainties that helped shrink extreme poverty and expand prosperity after the end of World War II.”
“The rise in trade barriers, heightened uncertainty, and the spike in financial market volatility are set to weigh on private consumption, international trade, and investment,” the report stated. “As a result, U.S. growth is expected to decelerate sharply in 2025, to 1.4 percent.” Additionally, global output is expected to slip by 0.5 percent.
“In 2026-27, a tepid recovery is expected, leaving global output materially below January projections, the report said. “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 … On the upside, uncertainty and trade barriers could diminish if major economies reach lasting agreements that address trade tensions.”
“The world economy today is once more running into turbulence,” World Bank chief economist Indermit Gill wrote. “Without a swift course correction, the harm to living standards could be deep.”
President Trump has yet to comment on the World Bank’s report.
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