theglobeandmail.com
World Bank Slashes 2025 Global Growth Forecast to 2.3% Amidst Rising Tariffs
The World Bank slashed its 2025 global growth forecast to 2.3%, citing higher U.S. tariffs and uncertainty as major factors impacting nearly 70% of global economies, with developing nations facing the most severe consequences, potentially taking two decades to recover from the economic losses of the 2020s.
- What is the World Bank's revised global growth forecast for 2025, and what are the primary factors contributing to this revision?
- The World Bank significantly lowered its global growth forecast for 2025 to 2.3%, a 0.4 percentage point decrease, primarily due to increased tariffs and uncertainty stemming from U.S. trade policies. This weaker-than-expected growth impacts nearly 70% of global economies, including major players like the U.S., China, and Europe.
- What are the potential long-term consequences of escalating trade barriers, and which economies are most vulnerable to these consequences?
- The World Bank's report highlights a concerning trend: if U.S. tariffs increase further, and other countries retaliate proportionally, global trade could seize up, causing a collapse in confidence and market turmoil. Developing economies, particularly those heavily reliant on trade with the U.S., will suffer disproportionately, potentially requiring decades to recover from the economic losses of the 2020s.
- How have U.S. trade policies specifically impacted the global growth forecast, and what retaliatory measures have been taken by other countries?
- The downward revision in the global growth forecast is directly linked to President Trump's trade policies, which have raised U.S. tariffs to their highest level in nearly a century and triggered retaliatory measures. This has created "record-high uncertainty," slowing investment and impacting global trade, projected to grow at only 1.8% in 2025, a sharp decline from previous years.
Cognitive Concepts
Framing Bias
The article frames the World Bank's report as primarily highlighting the negative impacts of Trump's trade policies. The headline and opening paragraphs immediately focus on the reduced growth forecast and attribute it to tariffs and uncertainty created by Trump's actions. While it mentions potential mitigating factors, their presentation is less prominent than the negative consequences, thus shaping the reader's initial perception of the situation. The repeated emphasis on the 'slashed' growth forecasts and negative consequences of the trade policies throughout the article reinforces this framing.
Language Bias
The article uses language that leans towards portraying the situation negatively. Words like "slashed", "headwind", "erratic", "turmoil", and "collapse" are used to describe the economic outlook and Trump's trade policies. While these are accurate descriptions of some aspects, the repeated use of such loaded language could influence the reader's perception towards a pessimistic view. More neutral alternatives could include phrases like "reduced", "challenge", "unpredictable", "volatility", and "uncertainty" respectively.
Bias by Omission
The article focuses heavily on the negative impacts of Trump's trade policies on global growth, but omits discussion of potential benefits or alternative perspectives on the economic consequences of these policies. While acknowledging some positive developments like increased trade dialogue and supply chain adaptation, the article doesn't delve into these aspects in sufficient detail to balance the predominantly negative portrayal. The lack of in-depth analysis on the potential effectiveness of tax cuts or other economic stimuli could be considered a bias by omission.
False Dichotomy
The article presents a somewhat simplified dichotomy between the negative effects of Trump's trade policies and the potential for a global recession. While it acknowledges a less than 10% chance of a recession, it heavily emphasizes the negative economic consequences, potentially overshadowing the nuances of the situation and the possibility of less severe outcomes. It also presents a somewhat false choice between continued high tariffs and a quick rebound, without discussing intermediate solutions or strategies.
Sustainable Development Goals
The World Bank significantly lowered its global growth forecast for 2025 to 2.3 percent, citing higher tariffs and uncertainty as major obstacles to economic growth. This directly impacts decent work and economic growth as slower growth leads to job losses, reduced investment, and decreased overall economic prosperity. The report highlights that developing economies will be disproportionately affected, with some potentially taking two decades to recover economic losses. Quotes such as "global economic growth this year would be its weakest outside of a recession since 2008" and "By 2027, developing economies' per capita GDP would be 6 per cent below pre-pandemic levels" support this assessment.