The World Bank has reported that while the global economy is experiencing steady growth, it is not robust enough to alleviate poverty worldwide. In its latest Global Economic Prospects report, the bank projects the world economy will expand by 2.7% in both 2025 and 2026, mirroring the growth rates of 2023 and 2024. However, this consistent growth falls short of the 3.1% average observed from 2010 to 2019, indicating a slowdown. This modest growth is insufficient to significantly reduce global poverty, especially in developing nations.
The World Bank highlights that low- and middle-income countries are expected to grow by 4.1% in 2025, slightly decreasing to 4% in 2026. This deceleration hampers efforts to improve living standards in these regions. Several factors contribute to this sluggish growth, including lingering effects from the COVID-19 pandemic, ongoing conflicts such as Russia’s invasion of Ukraine, and rising protectionist trade policies. Additionally, developing economies face challenges like high debt levels, slow investment, and the escalating costs associated with climate change. World Bank Chief Economist Indermit Gill emphasized that the next 25 years will be more challenging for these economies compared to the previous quarter-century.
Despite the overall slow growth, certain regions show varied economic performances. The United States, for instance, is projected to experience a 2.3% growth in 2025, supported by strong consumer spending and a resilient labor market. In contrast, the eurozone is expected to see a modest 1% growth due to factors like high energy costs affecting consumer spending and business investments. China’s economy is anticipated to slow down to 4.5% growth in 2025, influenced by a downturn in the real estate sector, while India is forecasted to maintain a robust 6.7% growth, driven by a recovery in rural consumption.
The World Bank underscores the urgency for policy interventions to stimulate investment, manage debt sustainably, and address the impacts of climate change. Without such measures, the goal of reducing global poverty remains at risk, as current economic growth trajectories are inadequate to meet this critical objective.
