WB Lowers Global Growth Outlook from 2.7% to 2.3%
Rising Trade Tensions and Policy Uncertainty Raise Concerns
US Growth Rate Down by 0.9 Percentage Points from Early Year...
China Maintains 4.5% Growth Projection
The World Bank (WB) has projected that the United States' economic growth rate this year will be just 1.4%, half the level of last year. Analysts say that the tariff war initiated by U.S. President Donald Trump is ultimately becoming a burden on the U.S. economy itself. The global economic growth rate is also expected to reach only 2.3%, which would be the lowest since 2008, excluding the period of the COVID-19 pandemic.
According to the World Economic Outlook report released by the WB on June 10 (local time), the global economic growth rate for this year is projected at 2.3%. This figure is 0.4 percentage points lower than the 2.7% forecast announced in January.
The WB identified heightened trade tensions and policy uncertainty as the main reasons for the downward revision of the growth rate. If this projection materializes, it would mark the lowest growth rate since 2008, excluding the global financial crisis and the pandemic period.
The WB stated, "A global recession is not expected," but also noted, "If the economic outlook for the next two years materializes, the average economic growth rate for the first seven years of the 2020s will be the lowest since the 1960s."
The U.S. growth rate for this year is expected to be 1.4%. This is a 0.9 percentage point downward revision from the 2.3% forecast at the beginning of the year and is only half of last year's 2.8%. Next year, the U.S. growth rate is expected to rebound slightly to 1.6%, but this is still 0.4 percentage points lower than the January forecast.
China, which is engaged in a tariff war with the U.S., is expected to grow by 4.5% this year. This is 0.5 percentage points lower than last year, but unchanged from the January forecast. Next year's growth rate is also projected at 4%, maintaining the previous outlook. This suggests that the impact of the tariff war will be greater on the U.S. than on China.
The growth rate for the Eurozone (the 20 countries using the euro) has been revised down by 0.3 percentage points from the previous 1.0% to 0.7% for this year, and next year's rate is expected to be 0.8%, which is 0.4 percentage points lower than the January forecast of 1.2%. Japan is also expected to grow by 0.7% this year and 0.8% next year, similar to the Eurozone.
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