The World Bank has projected that global economic growth will remain broadly stable through 2027, even as trade wars, geopolitical tensions and policy uncertainty continue to weigh on the outlook.
In its latest Global Economic Prospects report released on Wednesday, the World Bank said global growth is expected to average about 2.6% in the coming years, signalling a modest but steady recovery following recent shocks to the world economy. The institution noted that while growth remains below pre-pandemic levels, the risk of a sharp global slowdown has eased.
According to the report, easing inflation in major economies, more predictable monetary policy paths and resilient labour markets are helping to stabilise global output. However, the Bank cautioned that elevated interest rates, weak investment growth and rising trade restrictions continue to constrain stronger expansion.
Advanced economies are projected to grow more slowly than emerging and developing economies, reflecting tighter financial conditions and ageing populations. The World Bank said growth in advanced economies is expected to remain subdued, while developing economies benefit from stronger domestic demand and gradual improvements in external financing conditions.
The report highlighted that trade fragmentation and ongoing tariff disputes remain a major downside risk. Escalating trade barriers could disrupt supply chains, raise costs and dampen productivity, particularly for smaller and export-dependent economies.
For low- and middle-income countries, the World Bank warned that high debt burdens and limited fiscal space could restrict governments’ ability to invest in infrastructure, healthcare and education. It urged policymakers to prioritise structural reforms, improve governance and boost private-sector investment to support long-term growth.
The Bank also stressed the importance of global cooperation, noting that coordinated efforts on debt relief, climate financing and trade could significantly improve growth prospects. Without such cooperation, it warned, global growth could remain locked at historically weak levels.
Overall, the World Bank said the global economy is on a more stable footing than in previous years, but vulnerabilities remain. Policymakers were urged to avoid policy missteps that could reignite inflation or deepen trade tensions, as the path to stronger and more inclusive growth remains fragile.
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