The World Bank expects the worst contract for global growth since the 1960s
The World Bank expected the global economy to witness the slowest growth contract since the 1960s due to the impact of Donald Trump's customs definitions.
Growth expectations were reduced for nearly two -thirds of the world compared to the bank's recent expectations six months ago.
The bank expects a global growth of only 2.3 percent in 2025 (less than 0.4 percent of January expectations), and for 2027, it is expected to grow by 2.6 percent.
Among the countries whose expectations in the bank's semi -annual report are: Japan, Europe and the United States.
The bank's recent expectations came in January before Trump took over the US presidency.
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Since then, its imposition of customs definitions of 10 percent on all American imports, as well as steel and aluminum definitions, has led to the decline in financial markets in early April.
In May, a commercial court ruled that the majority of its global definitions are illegal, but the Trump administration won an appeal to keep it temporarily valid.
The bank reduced growth forecast for the United States in 2025 and 2026 due to the escalation of commercial tensions that shook investor confidence and private consumption.
But the bank did not reduce its expectations for the main United States competitor, China, saying that it has sufficient financial stability to bear the "opposite winds" resulting from global political instability.
The report said: "In light of the increasing political uncertainty and commercial barriers, the global economic context has become more challenging," warning of more "political uncertainty inhibiting soul" because of the possibility of states of "quick moves" that restrict trade.
The bank warned of further growth reduction if the United States increased definitions and high inflation.
Definitions may lead to "global trade paralysis in the second half of the year, accompanied by a widespread collapse in confidence, high uncertainty and financial market turmoil."
But the report did not predict a global recession, saying that its potential is less than 10 perache.
This came after the Organization for Economic Cooperation and Development also reduced its expectations for the global economy, expected to slow down to 2.9 percent instead of 3.1 percent.
Meanwhile, a new round of talks between the United States and China was held in London to end the trade war.
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