Low growth
Trump’s minister sees “golden age” – World Bank warns
January 16, 2025 – 11:33 p.mReading time: 2 minutes
Trump’s preferred Treasury Secretary Scott Bessent is full of optimism about the economy. But the World Bank is worried.
The World Bank warns of the negative effects that far-reaching tariffs would have on the global economy. The future US President Donald Trump, who will move back into the White House on Monday, is planning serious punitive measures – for example for goods from China, Canada, Mexico and possibly the European Union. “The timing and extent of possible changes in U.S. trade and financial policy are currently unclear,” it said. This clouds the outlook. The designated US Treasury Secretary Scott Bessent, on the other hand, sees great opportunities and is optimistic.
According to the World Bank’s forecast, global economic growth is stabilizing at a low level and is expected to level off at 2.7 percent this year and next.
However, the institution assumes that this growth is not enough to offset the damage caused in recent years by economic shocks such as the corona pandemic.
The World Bank also considers growth in the euro area to be weak. For 2025, the economic outlook predicts growth of 1.0 percent – that is 0.4 percentage points less compared to the forecast from last June. The World Bank attributes this to weak consumption, weak business investment and weak industrial activity. Manufacturing and industrial production remained weak. This is particularly true for Germany, which accounts for almost 30 percent of the euro zone’s gross domestic product.
US Treasury Secretary-designate Scott Bessent, on the other hand, has promised a “golden age” for the United States economy. The future US President Donald Trump has the “unique opportunity in a generation to set in motion a new economic golden age that will create more jobs as well as wealth and prosperity for all Americans,” the hedge fund manager said in his hearing on Thursday in the Senate in Washington.
The 62-year-old called before the Finance Committee of the Chamber of Congress to extend the tax cuts from Trump’s first term in office. If Congress doesn’t do this, the US could face the “largest tax increase in history” worth four trillion dollars (3.9 trillion euros), he warned.
In Washington, it is expected that Bessent will not least help shape Trump’s trade and customs policy, even if the Treasury Department is not directly responsible for this. Bessent denied at the hearing that Trump’s planned tariff increases would lead to higher consumer prices in the United States.