2020s weakest decade since 60s: World Bank's PREDICTION about worsening global economy | Is Trump tariffs to be blamed?

The World Bank has cut its forecast for global growth this year, and on Tuesday (June 10) warned that the 2020s are on course for the weakest performance for any decade since the 1960s.

The Washington-based global bank published its twice-yearly Global Economic Prospects report, and reduced its forecast for global GDP growth this year to 2.3 per cent, down from 2.7 per cent in January.

This would mark to be the slowest growth rate outside full-blown recessions since 2008, according to the bank.

It further warned that the global growth in the first seven years of this decade is on course to average 2.5 per cent, which will be the slowest for any decade since the 1960s.

Is Trump tariffs to be blamed?

The World Bank blamed US President Donald Trump's trade war for the 2020s to be the weakest performance for any decade.

After returning to the Oval Office, Trump has made several announcements, marking a major shift in the US policies, slapping tariffs on leading economies.

With only a “tepid” recovery in global growth, to 2.4%, expected in 2026, the bank said this decade was likely to be the weakest since the 1960s.

World Bank’s Chief Economist Indermit Gill said that decades of economic progress in developing countries had all but ground to a halt in recent years, with growth in investment and trade slowing and debt piling up.

“Outside of Asia, the developing world is becoming a development-free zone,” he said.

“It has been advertising itself for more than a decade. Growth in developing economies has ratcheted down for three decades – from 6% annually in the 2000s to 5% in the 2010s – to less than 4% in the 2020s.”

The World Bank prediction assumes that Trump's high "reciprocal" tariffs, announced in April will not be reimposed when the 90-day "pause" he announced last month comes to an end.

The bank urged governments to negotiate an end to the ongoing trade conflict. It further called on emerging markets and developing countries to rebuild their public finances by broadening their tax base.

The global bank stressed that the situation could worsen further, if tariffs end up being higher than expected and uncertainty continues.

“Risks to the global outlook remain tilted decidedly to the downside,” it added. “Growth could turn out to be lower if trade restrictions escalate or if policy uncertainty persists, which could also result in a buildup of financial stress.”