Global growth to hold steady at 2.7% in 2025-26 – World Bank

Global growth is expected to hold steady at 2.7 percent in 2025-26, the January 2025 World Bank Global Economic Prospects has revealed.

However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters.

Against this backdrop, emerging market and developing economies (EMDEs)—which fuel 60% of global growth—are set to enter the second quarter of the 21^st century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced.

Without course corrections, the report said, most low-income countries are unlikely to graduate to middle-income status by the middle of the century.

It added that policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.

Growth is projected to moderate in East Asia and Pacific, amid weak domestic demand in China, as well as in Europe and Central Asia due to decelerations in some large economies following strong growth last year.

In contrast, a pickup is anticipated in Latin America and the Caribbean, the Middle East and North Africa, South Asia, and Sub-Saharan Africa, partly underpinned by robust domestic demand.

In 2026, growth is expected to strengthen in most regions.

Sub-Saharan Africa Growth

Growth in SSA is expected to firm to 4.1$ in 2025 and 4.3% in 2026, as financial conditions ease alongside further declines in inflation.

Following weaker-than-expected regional growth last year, growth projections for 2025 have been revised upward by 0.2 percentage points, and for 2026 by 0.3 percentage point, with improvements seen
across various subgroups.

At the country level, projected growth has been upgraded for nearly half of SSA economies in both 2025 and 2026.

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