January 13, (THEWILL) — The global economy is proving more resilient than expected despite persistent trade tensions and policy uncertainty, the World Bank said in its latest Global Economic Prospects report released on Monday.
Global growth is projected to remain broadly steady over the next two years, easing to 2.6 per cent in 2026 before edging up to 2.7 per cent in 2027—an upward revision from the Bank’s June forecast.
The improvement largely reflects stronger-than-anticipated growth in the United States, which accounts for nearly two-thirds of the upward revision for 2026.
Despite the resilience, the World Bank warned that the 2020s are on track to be the weakest decade for global growth since the 1960s.
The sluggish pace has widened global income disparities, with nearly all advanced economies recording per capita incomes above pre-pandemic levels by end-2025, while about one in four developing economies remain poorer than they were in 2019.
Growth in 2025 was supported by a surge in trade ahead of policy changes and rapid adjustments in global supply chains.
These temporary boosts are expected to fade in 2026 as trade and domestic demand soften, although easing financial conditions and fiscal expansion in major economies are expected to cushion the slowdown.
Global inflation is forecast to ease to 2.6 per cent in 2026, supported by softer labour markets and lower energy prices.
Developing economies are expected to see growth slow to 4 per cent in 2026 from 4.2 per cent in 2025, before recovering modestly to 4.1 per cent in 2027.
Low-income countries are projected to grow faster, averaging 5.6 per cent over 2026–27, though this will not be sufficient to narrow income gaps with advanced economies.
The Bank warned that weak per capita income growth and rising debt levels could intensify job creation challenges, particularly as 1.2 billion young people enter the workforce in developing economies over the next decade.
It stressed the need for stronger investment, improved business environments, and credible fiscal frameworks to sustain growth and stability.
Ogochukwu Onwaeze
