Global economy on the brink of slowdown: World Bank warns of consequences of Trump’s trade war

The global economy could slow significantly this year. The main reason is international disputes and tariff wars that have arisen after significant changes in US trade policy with the arrival of the Donald Trump administration. This is stated in the World Bank report.

It is indicated that today the global economy is once again facing turbulence. Without a rapid correction of the exchange rate, the damage to living standards could be significant.

International disagreements, particularly over trade, have shattered many of the political certainties that helped reduce extreme poverty and expand prosperity after the end of World War II.

“This year alone, we project that these shocks will reduce global gross domestic product growth by almost 0.5 percentage points from the 2.3% growth rate expected at the start of the year. This is the weakest pace in 17 years, excluding global recessions,” the leading economists said.

They say that this trend is set to continue: by 2027, global GDP growth is expected to average just 2.5%, “the slowest pace of any decade since the 1960s.”

The poorest countries will be hit hardest, they say, and emerging markets will become a growth-free zone.

To avert economic recession, economists say, it is essential to restore healthy trade relations, establish fiscal order and accelerate job creation, especially in the context of unprecedented global demographic change.

The world is experiencing a historic demographic shift that is increasing the need for jobs in many of the poorest countries. The working-age population in sub-Saharan Africa is projected to nearly double by 2050, growing by more than 600 million, more than any region has ever seen in a 25-year period.

The working-age population in South Asia is expected to grow by almost 300 million over the same period, and in the Middle East and North Africa by more than 100 million.

“With decisive action, governments around the world can still restore the pace of poverty reduction and ensure improved living standards for the next generation,” the report says.