Investing.com — The World Bank said on Thursday that a 10 percent tariff imposed by the U.S. could reduce the rate of global economic growth, which is already tepid to 2.7 percent in 2025, by 0.3 percentage points.
This is on the condition that US trading partners respond with their own tariffs.
The World Bank mentioned that these tariffs, proposed by US President-elect Donald Trump, could potentially reduce US economic growth, which is projected to be 2.3% in 2025, by 0.9%.
This is assuming retaliatory tariffs are imposed. However, the bank also said US growth could pick up 0.4 percentage points in 2026 if US tax cuts continue, with less global impact.
In its latest Global Economic Prospect report, the World Bank forecast a steady global economic growth rate of 2.7% in 2025 and 2026, the same as in 2024. The bank also warned that developing economies now face the weakest long-term growth prospects since 2000
According to the bank, growth in developing countries is expected to reach 4% in 2025 and 2026. This is significantly lower than pre-pandemic estimates due to high debt, weak investment, slow productivity growth and the escalating costs of climate change.
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