Global economic growth is expected to decline in 2025 due to increased trade barriers and policy uncertainty, the World Bank has said.
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, according to the Global Economic Prospects report.
“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 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.
“The world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep,” stated the report.
The report called 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 necessary skills.
In a related development, the World Food Programme has reported that for the first time ever, it has no prepositioned food supplies in Haiti for the hurricane season, which lasts from June to November.
WFP also said staffers do not have the financial resources to respond quickly to an emergency weather event in the country.
Other UN agencies have prepositioned water and sanitation kits for 100,000 and health supplies for 20,000 people. However, these are not sufficient, especially in the absence of food, to meet needs during an emergency.
“The current lack of contingency stocks and operational funds leaves Haiti’s most at-risk communities dangerously unprotected at a time of heightened vulnerability,” deputy spokesperson Farhan Haq said in a briefing on Tuesday.
Food insecurity and malnutrition are already rampant, with over half the population facing acute hunger. Haiti is one of five countries worldwide which is experiencing famine-like conditions.
Continuing armed violence by gangs in the capital and in other regions has displaced over one million people, compounding the hunger crisis and limiting access to other basic services such as clean water and health care.
UN agencies in the country estimate that they will need $908 million to continue providing life-saving resources in Haiti, but currently, they have only received $78 million in emergency support.
