World Bank Sees US Growth Being Cut in Half

The World Bank forecast on Tuesday that President Trump's trade wars are expected to slash economic growth this year in the United States and around the world, per the AP. Citing "a substantial rise in trade barriers'' but without mentioning Trump by name, the 189-country lender predicted that the US economy—the world's largest—would grow half as fast (1.4%) this year as it did in 2024 (2.8%). That marks a downgrade from the 2.3% US growth it had forecast for 2025 in January.

• Globally: The bank also lopped 0.4 percentage points off its forecast for global growth this year. It now expects the world economy to expand just 2.3% in 2025, down from 2.8% in 2024.
• No soft landing? In a forward to the latest version of the twice-yearly Global Economic Prospects report, World Bank chief economist Indermit Gill wrote that the global economy has missed its chance for the "soft landing''—slowing enough to tame inflation without generating serious pain—it appeared headed for just six months ago. "The world economy today is once more running into turbulence," Gill wrote. "Without a swift course correction, the harm to living standards could be deep.''
• China: The Chinese economy is forecast to see growth slow from 5% in 2024 to 4.5% this year and 4% next. The world's second-largest economy has been hobbled by the tariffs that Trump has imposed on its exports, by the collapse of its real estate market, and by an aging workforce.
• Europe: The World Bank expects the 20 European countries that share the euro currency to collectively grow just 0.7% this year, down from an already lackluster 0.9% in 2024.
• India: It's once again expected to the be world's fastest-growing major economy, expanding at a 6.3% clip this year. But that's down from 6.5% in 2024 and from the 6.7% the bank had forecast for 2025 in January.
• Japan: Economic growth is expected to accelerate this year— but only from 0.2% in 2024 to a sluggish 0.7% this year, well short of the 1.2% the World Bank had forecast in January.
• Markets: They were unfazed by the report. The Dow was up slightly as investors waited for word on US-China talks, per CNBC.

(More World Bank stories.)