WORLD BANK

Proposed Tax Cuts Set to Boost Growth

President-elect Donald Trump's vowed tax cuts could aid global economic growth this year and next, the World Bank said Tuesday, fresh fuel for a world struggling with stagnant trade, weak investment and rising policy uncertainty.

The development institution said the global economy should expand 2.7% this year, up from last year's post-crisis low of 2.3%. The U.S. economy is picking up steam and stabilizing commodity prices are helping major emerging-market economies rebound, it said.

The bank warned that Mr. Trump could offset potential gains from his promised tax cuts if he triggers a trade war with rivals such as China and Mexico.

Nearly a decade after the financial crisis rocked world markets, the global economy has struggled to recover. Emerging markets have strained at the limits of growth without fundamentally restructuring.

--Ian Talley

ICELAND

Independence Party Forms Government

Iceland's Independence Party announced the formation of a center-right coalition government Tuesday, ending over two months of stalemate and seeing off a challenge from the anti-establishment Pirate Party.

The Independence Party coalition with the Revival and Bright Future parties will have 32 seats, the narrowest possible majority

--Charles Duxbury

MEXICO

Official Says Country Won't Pay for Wall

Mexico's new Foreign Minister Luis Videgaray said there is "no way" his country will pay for a wall Donald Trump wants to build along the Mexico-U.S. border. Mr. Trump last week said any money spent by the U.S. building the wall would be paid back by Mexico. "There is no way that's going to happen," Mr. Videgaray said on the Televisa network.

--Anthony Harrup(END) Dow Jones Newswires

January 11, 2017 02:48 ET (07:48 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.