Rabat – The global economy shows greater staying power than many economists expected, even as trade frictions and policy uncertainty continue to weigh on outlooks.
According to the World Bank’s latest Global Economic Prospects report, worldwide growth should remain broadly steady in the coming years, reaching 2.6% in 2026 before edging up to 2.7% in 2027.
This resilience draws largely from stronger activity in major economies, most notably the US, which accounts for most of the upward revision to next year’s forecast.
Yet the broader picture remains subdued. If current projections hold, the 2020s will stand out as the weakest decade for global growth since the 1960s, with long-term consequences for income levels across regions.
By the end of 2025, most advanced economies had already pushed per capita income above pre-pandemic levels.
Many developing economies did not share this recovery. Around one quarter still reported lower per capita income than in 2019, a gap that continues to widen living standards between richer and poorer countries.
Temporary trade support and future risks
Economic activity in 2025 benefited from an early surge in global trade as companies adjusted ahead of expected policy shifts. Supply chains also adapted at a rapid pace.
These factors offered temporary support that should fade in 2026 as trade momentum weakens and household demand cools. Even so, easier financial conditions and fiscal expansion in several large economies should limit the scale of the slowdown.
Global inflation should ease to 2.6% in 2026, helped by softer labor markets and lower energy prices, while growth should regain some strength in 2027 as uncertainty declines.
“With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics.
He warned, however, that resilience without dynamism risks straining public finances and credit markets. “Over the coming years, the world economy is set to grow slower than it did in the troubled 1990s, while carrying record levels of public and private debt,” he added.
Developing economies face slower growth
In developing economies, growth should slow to 4% in 2026 from 4.2% in 2025, before a modest rebound to 4.1% in 2027. Lower trade tensions, steadier commodity prices, and improved financial conditions should support this recovery.
Low income countries should perform better, with average growth of 5.6% over 2026 and 2027, driven by firmer domestic demand and export recovery.
Even at this pace, income gaps with advanced economies will persist. Per capita income growth in developing economies should reach 3% in 2026, well below its long term average, leaving income levels at only a small fraction of those in richer countries.
These trends add pressure to job creation across developing regions. Over the next decade, about 1.2 billion young people will reach working age, according to the report.
Fiscal sustainability
Fiscal pressures add another layer of risk. Many developing economies face strained public finances after years of overlapping shocks, rising social needs, and higher debt service costs.
The report devotes special attention to fiscal rules, which set limits on borrowing or spending to restore discipline. Countries that apply such rules often record stronger growth, higher private investment, and more stable financial systems.
Ayhan Kose, Deputy Chief Economist of the World Bank Group, said public debt in developing economies now stands at its highest level in decades, which makes fiscal credibility a pressing concern.
More than half of developing economies now operate under at least one fiscal rule. On average, these frameworks improve budget balances by more than one percentage point of GDP within five years and increase the likelihood of sustained fiscal improvement.
The report cautions, however, that results depend heavily on design, economic context, and political commitment.
Regional prospects remain uneven. Growth in East Asia and the Pacific should slow in the coming two years. Europe and Central Asia should see gradual improvement after a period of weak expansion. Latin America and the Caribbean should record modest gains.
The MENA region should see stronger momentum, while South Asia should recover after a brief slowdown. Sub Saharan Africa should also post gradual improvement.
Overall, the World Bank sees a global economy that resists shocks yet lacks the momentum needed to raise living standards at scale. The coming years will test whether policymakers can move beyond short term resilience and restore durable growth.