World Bank President Ajay Banga has cautioned that prolonged uncertainty and volatility in global trade could slow down worldwide economic growth. Speaking to CNBC-TV18 on May 8, Banga emphasized that new trade agreements between countries could help ease this unpredictability.
“If things continue the way they are — meaning if uncertainty and volatility remain part of the system — then definitely there will be a slowdown in global growth,” Banga warned.
However, he also noted that progress on trade deals could quickly improve the global economic outlook. “If tomorrow, or in the next ten days, two or three trade deals get signed, then all of a sudden there is less uncertainty, and the outlook changes,” Banga said.
He further explained that ongoing disruptions in international trade tend to delay investment decisions, as companies and investors hesitate to make long-term commitments amid unpredictable conditions. “Volatility creates uncertainty for a CEO or an investor. People will hold back on 10, 20, 30-year decisions. It takes a little while to turn that tide, so that will be a problem if it continues for a while, but we don’t know how long it will continue,” Banga added.