WASHINGTON (AFP) — As global trade tensions persist, investments are put on hold and without that cash to boost economic growth, poverty could surge, the World Bank’s chief economist warned Tuesday.
Without growth “inevitably, people will struggle,” Pinelopi Koujianou Goldberg said in an interview with AFP.
The US-China trade war — involving hundreds of billions of dollars in two-way trade — is at the center of global disputes that also include Washington’s friction with the European Union, changing rules over US trade with Canada and Mexico, and Brexit.
Amid the uncertainty, investments have declined, which undermines growth, especially in poor regions like Africa.
“This means that some countries will never manage to get out of poverty,” said Koujianou Goldberg, who has joint US-Greek nationality.
“But it also means countries that have managed to lift themselves out of poverty, that have become middle income countries by now, they may revert, they may go backwards.”
Koujianou Goldberg said it is a particular concern for Africa, where poverty is concentrated and economies are more fragile — but also where debt levels are “higher than ever,” increasing the risk of a financial crisis.
The World Bank and International Monetary Fund are among forecasters who have cut projections for growth this year and next, and the trade wars have continued and even worsened in recent months.