World growth to ease to 2.6% in 2026, rise to 2.7% in 2027: World Bank

Global growth is projected to remain broadly steady over the next two years, easing to 2.6 per cent in 2026 before rising to 2.7 per cent in 2027, an upward revision from the June forecast.

World economy is proving more resilient than anticipated despite persistent trade tensions and policy uncertainty, the World Bank said.
Global growth is projected to stay broadly steady over the next two years, easing to 2.6 per cent in 2026 before rising to 2.7 per cent in 2027.
Global inflation is projected to edge down to 2.6 per cent in 2026, reflecting softer labour markets and lower energy prices.

The resilience reflects better-than-expected growth, especially in the United States, which accounts for about two-thirds of the upward revision to the forecast in 2026.

Even so, if these forecasts hold, the 2020s are on track to be the weakest decade for global growth since the 1960s.

The sluggish pace is widening the gap in living standards across the world, the report says.

In 2025, growth was supported by a surge in trade ahead of policy changes and swift readjustments in global supply chains. These boosts are expected to fade in 2026 as trade and domestic demand soften.

However, the easing global financial conditions and fiscal expansion in several large economies should help cushion the slowdown, a World Bank release said citing the report.

Global inflation is projected to edge down to 2.6 per cent in 2026, reflecting softer labour markets and lower energy prices.

Growth is expected to pick up in 2027 as trade flows adjust and policy uncertainty diminishes.

In 2026, growth in developing economies is expected to slow to 4 per cent from 4.2 per cent in 2025 before edging up to 4.1 per cent in 2027 as trade tensions ease, commodity prices stabilise, financial conditions improve and investment flows strengthen.

Growth is projected to be higher in low-income countries, reaching an average of 5.6 per cent over 2026-27, buoyed by firming domestic demand, recovering exports and moderating inflation.

However, this will not be sufficient to narrow the income gap between developing and advanced economies.

Per capita income growth in developing economies is projected to be 3 per cent in 2026—about a percentage point below its 2000-2019 average.

At this pace, per capita income in developing economies is expected to be only 12 per cent of the level in advanced economies.

These trends could intensify the job-creation challenge confronting developing economies, where 1.2 billion young people will reach working age over the next decade, according to the World Bank.

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