June 6 (UPI) -- The World Bank has lowered its expectations for worldwide economic growth for the rest of 2019, it said in a new forecast.
The global economy has slowed this year to its lowest pace since 2016 as tariffs and trade barriers reduce investment around the world.
In an analysis this week, the World Bank projected a 2.6 percent growth for remainder of 2019, down 0.3 percentage point from January's prediction. That figure is projected to rise to 2.7 percent next year and 2.8 percent in 2021.
The study said while the economy could stabilize, the momentum to get there is fragile and subject to risk. The pessimistic forecast will affect poor, developing countries most of all.
"Stronger economic growth is essential to reducing poverty and improving living standards," World Bank Group President David Malpass said in a statement. "Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential."
Emerging and developing economies are carrying a large debt load that's between 15 to 51 percent of gross domestic product. Governments spending large amounts of money on service debt allocate less on other important activities, the World Bank said. Eventually, the government will have to raise taxes, which could slow consumer spending.
Among developed economies, Europe will have the biggest slowdown, with growth at about 1.4 percent in 2020-2021. The United States could grow 2.5 percent in 2019.
"While almost every economy faces headwinds, the poorest countries face the most daunting challenges because of fragility, geographic isolation and entrenched poverty," said Ceyla Pazarbasioglu, World Bank group vice president for equitable growth, finance and institutions. "Unless they can get onto a faster growth trajectory, the goal of lowering extreme poverty under 3 percent by 2030 will remain unreachable."
The United Nations Department of Economic and Social Affairs had similar growth projections in its midyear World Economic Situation and Prospect report issued earlier this week. The World Trade Organization made a similar move in April, lowering its 2019 growth forecast also to 2.6 percent.