Summary:
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Global GDP seen at 2.6% in 2026, 2.7% in 2027
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US resilience drives bulk of upward revision
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Emerging market growth remains structurally weak
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2020s shaping up as weakest growth decade since 1960s
The global economy is showing greater resilience than previously expected, but growth remains too uneven and too weak to meaningfully reduce poverty or lift long-term living standards, according to the latest Global Economic Prospects report from the World Bank.
In its semi-annual assessment, the World Bank said global GDP growth is forecast to slow modestly to 2.6% in 2026 from 2.7% in 2025, before edging back up to 2.7% in 2027. While the headline profile remains subdued, the Bank upgraded its 2026 growth forecast by 0.2 percentage points from its June outlook, and lifted its 2025 estimate by 0.4 percentage points, citing stronger-than-expected performance in advanced economies.
Around two-thirds of the upward revision reflects resilience in the United States, despite ongoing tariff-related trade disruptions. The Bank expects U.S. growth to rise to 2.2% in 2026, from 2.1% in 2025, with both figures revised higher from June. It said an early surge in imports to front-run tariffs weighed on growth in 2025, but larger tax incentives are expected to support activity in 2026, partially offsetting the drag from tariffs on investment and consumption.
Despite the improved near-term outlook, the World Bank warned the global economy is on track for its weakest decade of growth since the 1960s, a pace insufficient to prevent stagnation, joblessness and rising vulnerability across emerging markets.
“With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty,” said the World Bank’s chief economist. He cautioned that resilience and dynamism cannot diverge indefinitely without placing strain on public finances and credit markets.
Growth in emerging market and developing economies is forecast to slow to 4.0% in 2026 from 4.2% in 2025, though both projections were revised modestly higher. Excluding China, growth in this group is expected to stagnate at 3.7%, unchanged from 2025.
China’s growth is seen easing to 4.4% in 2026 from 4.9%, though both figures were revised up from June, reflecting fiscal stimulus and stronger exports to non-U.S. markets.
Overall, the report paints a picture of a global economy that is holding up better than feared, but increasingly reliant on a narrow set of growth engines.
This article was written by Eamonn Sheridan at investinglive.com.