By Anjali Sharma
UNITED NATIONS – World Bank said in a report published on Tuesday that the global economic growth is expected to decline this year due to increased trade barriers and policy uncertainty.
According to the Global Economic Prospects report the growth is projected to weaken to 2.3 per cent, or nearly half a percentage point lower than expected at the start of the year.
“The global outlook is predicated on tariff rates close to those of late May prevailing,” it said.
“Accordingly, pauses to previously announced tariff hikes between the United States and its trading partners are assumed to persist.”
The report said that global recession is not expected, average global growth is on track to be the slowest of any decade since the 1960s.
Growth forecasts are being slashed in 70 per cent of all economies, with the poorest countries most affected.
The report showed that in most developing countries, 60 per cent, growth should average 3.8 per cent in 2025 before reaching an average 3.9 per cent in the following two years more than a percentage lower than the average in the 2010s.
The slowdown will impact efforts by developing countries in areas such as job creation, poverty reduction and closing income gaps with richer economies.
Indermit Gill, Senior Vice President and Chief Economist said that “The world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep,”
The report called for rebuilding trade relations as “economic cooperation is better than any of the alternatives for all parties,” he said.
