The World Bank stated on Tuesday (January 13) that the global economy’s resilience is stronger than previously expected, and it is projected that the growth of Gross Domestic Product (GDP) in 2026 will be slightly higher than the forecast in June of last year. However, the institution also warned that economic growth is too concentrated in developed countries and overall too weak to reduce extreme poverty.
According to the World Bank’s semi-annual report “Global Economic Prospects” released on Tuesday, global economic growth is expected to slightly decelerate from 2.7% in 2025 to 2.6% this year, and then rise to 2.7% in 2027.
The GDP forecast for 2026 is 0.2 percentage points higher than the previous forecast from June of last year, with growth in 2025 exceeding the previous forecast by 0.4 percentage points.
The World Bank noted that while tariff-induced trade disruptions exist, about two-thirds of the upward revision reflects the impact of the better-than-expected performance of the U.S. economy. The institution predicts that U.S. GDP growth in 2026 will reach 2.2%, higher than 2.1% in 2025, exceeding the forecast values from June last year by 0.2 and 0.5 percentage points, respectively.
However, the World Bank pointed out that if current forecasts remain unchanged, the 2020s will be the slowest decade of global GDP growth since the 1960s, and the growth is too slow to prevent emerging markets and developing countries from falling into stagnation and unemployment.
Chief Economist of the World Bank, Indermit Gill, stated in a release, “Year after year, the ability of the global economy to generate growth has been weakening, while the resilience to policy uncertainty seems to be strengthening.” He added that global per capita GDP in 2025 was 10% higher than before the COVID-19 pandemic, marking the fastest recovery in the past 60 years following a major crisis. However, he pointed out that many developing countries are falling behind, with one-quarter of countries still having per capita income lower than the 2019 level, with the poorest countries being particularly affected.
The growth of emerging markets and developing economies is expected to slow from 4.2% in 2025 to 4.0% in 2026, exceeding the forecast values from June by 0.2 and 0.3 percentage points, respectively.
The decline in China’s economic growth rate will be more significant, decreasing from 4.9% in 2025 to 4.4% in 2026. However, due to fiscal stimulus policies and increased exports to non-U.S. markets, both of these forecast values are 0.4 percentage points higher than in June.
The growth in the Eurozone will decelerate from 1.4% in 2025 to 0.9% in 2026 due to U.S. tariffs dragging, but with increased defense spending in Europe, GDP growth in the Eurozone is expected to rebound to 1.2% in 2027.
In Japan, the economic prospects for 2026 remain largely unchanged, with GDP growth expected to decelerate from 1.3% in 2025 to 0.8% in 2026. Part of the growth in 2025 was due to businesses exporting to the U.S. in advance to avoid new tariffs imposed by then-President Trump. However, the World Bank noted that due to slowing consumption and investment domestically in Japan, the country’s GDP growth will remain at 0.8% in 2027.
(This article referenced reporting from Reuters)