The World Bank predicts that rising trade barriers and policy uncertainty will slow global economic growth in 2025.
As to the Global Economic Prospects study, growth is anticipated to deteriorate to 2.3%, about half a percentage point less than anticipated at the beginning of 2013.
“The global outlook is predicated on tariff rates close to those of late May prevailing,” it said in a report on Tuesday.
“Accordingly, pauses to previously announced tariff hikes between the United States and its trading partners are assumed to persist.”
Although a 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 nearly 70 per cent of all economies, with the poorest countries most affected.
In most developing countries, nearly 60 per cent, growth should average 3.8 per cent in 2025 before reaching an average of 3.9 per cent in the following two years, more than a percentage lower than the average in the 2010s.
The slowdown will impact developing countries’ efforts in areas such as job creation, poverty reduction, and closing income gaps with richer economies.
“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 calls for rebuilding trade relations as “economic cooperation is better than any of the alternatives – for all parties,” said Indermit Gill, Senior Vice President and Chief Economist.
Countries are also urged to improve business climates and to promote employment by ensuring workers are equipped with the necessary skills.
The World Food Programme (WFP) has announced that it lacks any pre-positioned food supplies in Haiti for the June-November hurricane season, a first for the organisation.
Additionally, WFP reports insufficient financial resources to provide timely aid during weather emergencies. While other UN agencies have deployed water, sanitation, and health supplies for a limited population, the absence of food reserves leaves Haiti vulnerable during crises.
These supplies, targeting 100,000 and 20,000 people respectively, are insufficient, particularly without accompanying food provisions.
Source: BusinessDay
Image Credit: Brookings Institution
