A new World Bank report has delivered a stark warning about the fragile state of the global economy, revealing that roughly one quarter of developing countries remain poorer today than they were before the COVID-19 pandemic, underscoring an uneven recovery that risks entrenching inequality and constraining long-term development prospects.
According to the World Bank’s latest Global Economic Prospects report, released on January 13, the global economy continues to display resilience amid ongoing trade tensions and policy uncertainty, but growth remains weak and unevenly distributed. While almost all advanced economies had succeeded in restoring per-capita incomes above their pre-pandemic levels by the end of 2025, a significant portion of developing economies lag well behind, with their national income levels still below 2019 benchmarks.
The group of developing nations that have seen per-capita incomes decline includes several low-income countries, particularly in sub-Saharan Africa, where structural challenges have compounded the economic shocks inflicted by the pandemic. This divergence in economic fortunes has heightened concerns that the benefits of the global recovery are accruing disproportionately to wealthier nations, leaving poorer countries exposed to persistent stagnation.
The World Bank forecasts that global growth will ease to around 2.6 per cent in 2026 before picking up slightly to 2.7 per cent in 2027. Growth in emerging market and developing economies is expected to slow to about 4.0 per cent in 2026, down from 4.2 per cent in 2025, and remain subdued relative to pre-pandemic averages. Although low-income countries may grow somewhat faster — at approximately 5.6 per cent over 2026–27 — this pace remains insufficient to bridge the widening income gap between developing and advanced economies.
World Bank economists emphasised that, if these forecasts hold, the 2020s could be remembered as the weakest decade for global growth since the 1960s, despite pockets of resilience, such as stronger-than-anticipated performance in the United States, which has contributed significantly to the modest upward revision of global growth projections.
The report also highlights deep structural challenges facing the global economy. Per-capita income growth in developing economies is projected to hover around 3 per cent in 2026, roughly a percentage point below its average from 2000-19, indicating a protracted slowdown that could undermine efforts to create jobs and reduce poverty. Public and private debt levels are at record highs in many emerging and developing countries, raising concerns about fiscal sustainability and credit conditions.
The World Bank has reiterated the need for governments to pursue disciplined fiscal policies, expand trade and investment, and invest in education, technology and human capital to reignite growth. Without such structural reforms, economists say, the global economy may struggle to generate the dynamism necessary to absorb a growing labour force and meet long-term development goals.
As the world charts a path beyond the pandemic’s economic fallout, the report’s findings underscore how uneven recovery patterns have left a significant share of the developing world facing diminished progress. In some regions, setbacks have been exacerbated by conflict, commodity price volatility and climate-related shocks, further complicating efforts to boost resilience and prosperity.
The World Bank’s warning highlights that without decisive policy responses and renewed international cooperation, longstanding disparities in income, investment and opportunities could deepen — posing serious implications for global stability and inclusive growth in the years ahead.
