The World Bank recently released its latest assessment of the global economy, indicating steady growth but with limited relief for the world's poorest populations. The report forecasts a 2.7% expansion in the world economy for both 2025 and 2026, reflecting a consistent yet lackluster performance compared to previous years.
The global economy continues to face challenges from recent adverse shocks, including the impacts of COVID-19 and geopolitical events such as Russia's invasion of Ukraine. Despite these obstacles, the report does offer some positive news, with global inflation expected to decrease to an average of 2.7% in the next two years.
For low- and middle-income countries, growth rates are projected to be around 4% in 2026, which the World Bank deems insufficient to alleviate global poverty. Developing economies have experienced a slowdown in growth over the years, with factors such as sluggish investment, high debt levels, climate change costs, and protectionist trade policies hindering their progress.
The report highlights disparities in economic growth between wealthy nations and developing economies, with the latter facing significant challenges in achieving sustainable development. Conflict and violence in regions like Gaza and Sudan have further impeded growth in the world's poorest countries.
While the United States is expected to see a GDP expansion of 2.3% in 2025, Europe's growth remains sluggish, with the eurozone countries experiencing anemic consumer spending and business activity. China's economy is projected to slow down, influenced by a downturn in the real estate market, while India continues to show strong growth driven by rural farm production.
The World Bank's forecasts are based on current trade and budget policies, with uncertainties arising from potential shifts in economic policies, such as those proposed by President-elect Donald Trump in the United States. The report emphasizes the need for stable economic policies to support global growth and alleviate poverty in developing economies.
