World Bank has released its Global Economic Prospects (GEP) Report 2026, noting that the global economy is more resilient than expected, but growth remains uneven, concentrated in advanced economies, and too weak to significantly reduce extreme poverty.
Key Global Growth Projections
- Global GDP growth:
- 2025: 2.7%
- 2026: 2.6%
- 2027: 2.7%
- Despite resilience, the 2020s are on track to be the weakest decade for global growth since the 1960s.
- Growth remains insufficient to address stagnation, unemployment, and poverty in many developing economies.
Upward Revisions in Forecast
- 2026 global GDP forecast raised by 0.2 percentage points compared to June projections.
- 2025 growth exceeds earlier forecast by 0.4 percentage points.
- Around two-thirds of the upward revision is due to better-than-expected growth in the United States, despite tariff-driven trade disruptions.
United States Outlook
- US GDP growth:
- 2025: 2.1%
- 2026: 2.2%
- Key drivers:
- Stronger domestic demand
- Bigger tax incentives supporting growth in 2026
- Constraints:
- Tariffs continue to weigh on investment and consumption
- Import surge in early 2025 (to beat tariffs) temporarily dampened growth
Per Capita Income Trends
- Global GDP per person in 2025:
- 10% higher than pre-COVID (2019) — fastest recovery from a major crisis in 60 years
- However:
- 25% of developing countries still have lower per-capita incomes than in 2019
- Poorest nations remain the most affected
Emerging Markets & Developing Economies (EMDEs)
- Overall EMDE growth:
- 2025: 4.2%
- 2026: 4.0%
- Excluding China:
- Growth remains flat at 3.7% in both 2025 and 2026
China
- Growth slowdown:
- 2025: 4.9%
- 2026: 4.4%
- Forecast revised upward by 0.4 percentage points due to:
- Fiscal stimulus
- Increased exports to non-US markets
Advanced Economies Outlook
Euro Area
- 2025: 1.4%
- 2026: 0.9%
- 2027: 1.2% (recovery supported by higher defence spending)
- Growth dampened by US tariffs
Japan
- 2025: 1.3% (boosted by export front-loading)
- 2026: 0.8%
- 2027: 0.8%
- Weak consumption and investment remain key constraints
Regional Growth Outlook (2026–27)
| Region | 2026 | 2027 |
| East Asia & Pacific | 4.4% | 4.3% |
| Europe & Central Asia | 2.4% | 2.7% |
| Latin America & Caribbean | 2.3% | 2.6% |
| Middle East, North Africa, Afghanistan & Pakistan | 3.6% | 3.9% |
| South Asia | 6.2% | 6.5% |
| Sub-Saharan Africa | 4.3% | 4.5% |
Key Structural Concerns
- Persistent trade protectionism and tariff barriers
- Weak investment momentum
- High debt burdens in developing countries
- Ageing populations and low productivity growth
- Fragmentation of global governance and weak multilateral cooperation
Why Outlook is Worrying
- Economic resilience without dynamism cannot continue indefinitely
- Risk of:
- Public finance stress
- Credit market instability
- Growth too weak to:
- Eliminate extreme poverty
- Create sufficient jobs in EMDEs
World Bank
- Established: 1944 (as IBRD, alongside IMF)
- Members: 189 countries (India is a member)
- Headquarters: Washington DC
- Five institutions:
- International Bank for Reconstruction and Development (IBRD)
- International Development Association (IDA)
- International Finance Corporation (IFC)
- Multilateral Investment Guarantee Agency (MIGA)
- International Centre for Settlement of Investment Disputes (ICSID)
(India is not a member of ICSID)
Major World Bank Reports
- Global Economic Prospects (GEP)
- World Development Report
- Human Capital Index
GEP vs WESP
| Aspect | GEP | WESP |
| Publisher | World Bank | UN DESA, UNCTAD & UN bodies |
| Focus | Development & poverty | SDGs & global cooperation |
| Emphasis | EMDEs, finance, growth risks | Sustainable & inclusive growth |
| Tone | Development-centric | Multilateral policy-oriented |