The global economic turmoil will hit poor countries the hardest. The trade war is disastrous for developing economies. If nothing changes, the well-being of billions of people will be at stake.
The World Bank predicts that global economic growth will fall to 2.3 percent this year. That is the weakest growth in seventeen years, after actual recessions. In 2027, average growth could fall to 2.5 percent – the lowest level since the 1960s.
Six months ago, it still seemed as if a “soft landing” was possible for the global economy, but that moment has passed. International unrest, particularly as a result of the trade war, is hindering the fight against extreme poverty.
“The poorest countries will suffer the most,” warns the World Bank, the world’s largest institution for development cooperation. In 2027, incomes in rich countries will recover to pre-coronavirus pandemic levels, but developing economies may need two decades to recover.
The World Bank has three recommendations to ensure improvement: improve trade relations, restore fiscal control and create jobs. “The world economy is at a turning point,” the institute writes.