World Bank: Global Economy Shows Resilience, Developing Nations Lag
Overview
The World Bank's latest report indicates global economic resilience against trade disruptions, with growth projected to remain stable. However, recovery is uneven, leaving many developing economies poorer than pre-pandemic levels. The 2020s are shaping up to be the weakest growth decade since the 1960s, widening income gaps and posing a significant jobs challenge for developing nations facing record debt.
Global Economy Shows Unexpected Resilience
The global economy is demonstrating remarkable resilience, weathering historic trade disruptions and policy uncertainties better than anticipated, according to the World Bank's latest Global Economic Prospects report. Global growth is projected to hold steady at 2.6% in 2026 and 2.7% in 2027, an upward revision driven significantly by stronger-than-expected performance in the United States.
Uneven Recovery Widens Gaps
Despite this resilience, the recovery remains starkly uneven. If current forecasts hold, the 2020s are poised to be the weakest decade for global growth since the 1960s. Income disparities are widening considerably; while almost all advanced economies are expected to surpass their pre-pandemic per capita income levels by the end of 2025, roughly one in four developing economies will still be poorer.
Temporary Tailwinds and Future Concerns
Growth in the near term benefited from a pre-emptive surge in trade ahead of policy shifts and swift supply chain adjustments. These temporary boosts are expected to fade by 2026 as trade momentum and domestic demand soften. Easing global financial conditions and fiscal stimulus in major economies are anticipated to cushion the slowdown.
Developing World Faces Mounting Challenges
Developing economies are forecast to see growth slow to 4% in 2026 from 4.2% in 2025, before a slight increase to 4.1% in 2027. While low-income countries are projected to grow faster, averaging 5.6% over 2026-27, income convergence remains sluggish. Per capita income growth in developing economies is projected at 3% in 2026, significantly below the 2000-2019 average.
Debt and Jobs Crisis Loom
The report highlights a critical jobs challenge, particularly in developing countries, where 1.2 billion young people will enter the workforce this decade. This demographic surge demands substantial investment in human, physical, and digital capital. Compounding these issues, public debt in emerging and developing economies has reached a 50-year high, weakening fiscal sustainability and necessitating urgent measures to restore fiscal credibility. World Bank economists stress the need for trade liberalization, private investment, and targeted government spending to avert stagnation.
