World Bank Chief Advocates for Trade Liberalization Amid Global Tensions

World Bank President Ajay Banga urged developing nations to reduce tariffs to foster trade and counter potential reciprocal import taxes. Highlighting the current global economic slowdown and trade tensions, he emphasized the importance of negotiation, regional integration, and reforms to spur investment and job creation.

Ajay Banga, President of the World Bank, has called on developing countries to consider reducing their trade tariffs, arguing that this could counter the risk of reciprocal import taxes and enhance competitiveness. Speaking to reporters, Banga highlighted that many lower-income nations maintain tariffs higher than those of advanced economies, suggesting that liberalizing trade could open markets and fuel economic growth.

The global economic environment remains in flux, with uncertainties exacerbated by recent U.S. tariffs and retaliatory actions from China and other nations. Banga noted the considerable impact on countries varies and anticipates global growth to slow. The World Bank has already projected flat global economic growth of 2.7% through 2025 and 2026, signaling one of the weakest long-term outlooks in decades for developing economies.

Banga stressed the importance of negotiating and maintaining dialogue on trade issues, advocating for deeper regional integration among developing countries. He also responded to significant cuts in foreign aid by some governments, underscoring the importance of creating regulatory frameworks to attract private sector investment, which is crucial for addressing the employment gap faced by these countries.

(With inputs from agencies.)