Investors set aside their jitters over the Middle East tinderbox to send stocks to new highs. But economists taking a long view see graver threats to growth both at home and abroad looming on the horizon. The World Bank in its latest forecast cut expectations for global growth this year by .2 percent — to 2.5 percent — citing “fragile” conditions brought on by ongoing trade uncertainty and a slowdown in investment. That would amount to a tiny improvement over 2019, which saw the worldwide economy expand by 2.4 percent, the slowest pace since the 2008 financial crisis.
The development bank left room for rosier outcomes but warned that “downside risks predominate, including the possibility of a re-escalation of global trade tensions, sharp downturns in major economies” and disruptions in the developing world.
The outlook closer to home is gloomier. The World Bank sees U.S. growth stumbling from the unspectacular 2.3 percent growth it notched in 2019 to 1.8 percent this year — on its way down to 1.7 percent in both 2021 and 2022. That would amount to a significant underperformance measured against President Trump’s promise to deliver at least 3 percent growth.
And the World Bank’s forecasters aren’t alone. Economists gathered at the American Economic Association’s annual meeting last week shared a “dark” mood, according to the New York Times’s Jim Tankersley and Jeanna Smialek.