Global Trade Growth Slows Due to Conflicts and Tariffs

Global Trade Growth Slows Due to Conflicts and Tariffs

The global economy is facing significant headwinds as trade growth slows due to escalating conflicts and rising tariffs. According to recent reports, the World Bank and the United Nations have both downgraded their global growth forecasts for 2025, citing heightened trade tensions and policy uncertainty.

Impact on Global Economy

The World Bank projects global growth to weaken to 2.3% in 2025, a significant downgrade from earlier forecasts. The United Nations also revised its growth projection to 2.4%, highlighting the broad-based slowdown affecting both developed and developing economies. Key factors include disruptions in global supply chains, reduced foreign direct investment, and weakening commodity prices.

Regional Perspectives

Growth in East Asia and the Pacific is expected to slow to 4.5%, while Europe and Central Asia face a projected growth rate of just 2.4%. Latin America and the Caribbean are anticipated to grow at 2.3%, the lowest among emerging market regions. Sub-Saharan Africa, despite a slight uptick, remains vulnerable due to high debt levels and climate-related challenges.

Policy Recommendations

Experts emphasize the need for multilateral cooperation to restore stability in global trade. Strengthening fiscal resilience, enhancing institutional quality, and fostering private investment are critical to mitigating the adverse effects of trade conflicts. The upcoming Fourth International Conference on Financing for Development in Sevilla, Spain, will address these challenges.