The World Bank has trimmed its global growth forecasts slightly for this year due to a slower-than-expected recovery in trade and investment despite cooler trade tensions between the United States and China.
In its latest Global Economic Prospects report, the World Bank shaved 0.2 percentage point off of growth, with the 2020 global economic growth forecast at 2.5%.
This takes into account the Phase 1 trade deal announced by the United States and China, which suspended new U.S. tariffs on Chinese consumer goods scheduled for Dec. 15 and reduced the tariff rate on some other goods.
Both trade and overall economic growth prospects remain vulnerable to flare-ups in U.S.-China trade tensions as well as rising geopolitical tensions.
World Bank officials say they were not able to estimate the growth effects of a wider U.S.-Iran conflict, but said this would increase uncertainty, which would hurt investment prospects.
Emerging market economies are expected to see a pickup in growth to 4.3% in 2020 from 4.1% in 2019.