Global investment is at its worst level for 3 years thanks to Trump's trade wars, World Bank says
Oliver Contreras/Getty; Greg Baker/Getty; Shayanne Gal/Business Insider
- Global investment, economic growth, and business confidence have dropped to record lows this year, the World Bank said in a report published on Tuesday.
- President Donald Trump's trade wars have largely contributed to the global slowdown, the report said.
- The World Bank also attributed global slowdown to "renewed financial turmoil in emerging and developing economies" and "a more abrupt deceleration of economic growth."
- Trump is currently fighting trade wars on multiple fronts, including a tit-for-tat tariff battle with China, potential new tariffs on the European car industry, and a threat to impose a 5% tax on all Mexican goods in an attempt to curb migration.
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President Donald Trump's trade wars have caused so much uncertainty that the global economy is moving at its lowest pace in three years, the World Bank said in a new report.Global economic growth is expected to slow to 2.6% this year, the World Bank said in its semi-annual Global Economic Prospects report. Specifically, advanced economies are expected to grow at 1.7%, and emerging-market and developing economies at 4%.Advertisement
The report, published on Tuesday, is titled "Heightened Tensions, Subdued Investment."
Business confidence across major advanced and developing economies, as of April 2019, is also at its lowest point since April 2016, according to the World Bank's analysis."Of particular concern is a slowdown in global trade growth to the lowest level since the financial crisis ten years ago and a tumble in business confidence," the report said.
The Trump administration is currently waging trade wars on multiple fronts: It's currently engaged in a tit-for-tat tariff battle with China, and also announced a 5% tariff on all Mexican goods to stop the influx of migrants last week.delayed by six months a decision to impose steep tariffs on cars entering the US, a decision which would have seen the European Union retaliate with their own tariff list against the US, Bloomberg reported.Advertisement
The World Bank said it expects the pace of economic growth to eventually stabilize, but warned that the world economy could still be vulnerable if those risks persist or worsen.
Read more: Dow soars 500 points after Powell signals a rate cut is on the table, investors ignore global trade tensions
Global stocks, US futures, and US equities jumped after Powell's statement, with analysts suggesting that it indicated central banks' willingness to help markets to maintain economic growth, Business Insider's Theron Mohamed reported.
- Read more about Trump's trade wars:
- Avocados, cars, and all the other products that will get more expensive if Trump puts a 5% tariff on Mexican imports
- China has been dropping hints that it will weaponize its rare earths as a trade-war tactic. Here's why it probably won't follow through.
- MORGAN STANLEY: America could go into recession before next spring if the US-China trade war escalates