The global economy is at risk of a sharp slowdown due to escalating international trade disputes and tariff wars. Leading economists at the World Bank point out that just six months ago, a “soft landing” for the global economy was anticipated following a period of natural and man-made disasters. However, these expectations are no longer relevant.
This is reported by Finway
Global Risks and Impact on GDP
Currently, the global economic situation is once again characterized by instability. According to experts’ estimates, without prompt and effective changes in government policies, the negative impact on the standard of living in various countries could be significant. The main reason for the intensification of crisis trends has been identified as international trade discrepancies, which have increased overall uncertainty in the markets.
“Just six months ago, it seemed that a ‘soft landing’ was expected for the global economy, which had stabilized after an extraordinary series of both natural and man-made disasters over the past few years. But that moment has vanished,”
This year, according to the World Bank’s forecasts, the impact of these shocks will lead to a decrease in the growth rate of global GDP by nearly 0.5%, to a level of 2.3%. This will be the lowest figure in the last 17 years, excluding periods of global recessions.
Forecast to 2027 and Recommendations
According to analytics, this trend is expected to continue in the coming years. By 2027, the average annual growth of global GDP is likely to be only 2.5%, the slowest pace for any decade since the 1960s. This will have the most negative impact on low-income countries, as well as on developing markets, which may face a slowdown in development.
To prevent further deterioration of the situation, experts advise governments to restore normal trade relations, ensure fiscal stability, and enhance the creation of new jobs, taking into account global demographic changes.