Global Economy Stages Resilient Growth Despite Challenges

The World Bank predicts a slight improvement in global GDP growth to 2.6% in 2026, up from initial forecasts. However, the growth remains concentrated in advanced economies, risking stagnation in developing nations. Despite challenges like tariffs, the U.S. is expected to see notable GDP growth due to tax incentives.

The global economy is proving more resilient than anticipated. In its latest report, the World Bank forecasts a slight improvement in global GDP growth to 2.6% in 2026. This marks an increase from earlier predictions made in June. However, the growth is largely centered around advanced economies, a situation deemed insufficient to significantly alleviate extreme poverty levels worldwide.

The World Bank's semi-annual Global Economic Prospects report highlights that global output growth will modestly fall to 2.6% in 2026 from 2.7% in 2025, with a recovery to 2.7% expected in 2027. Much of this upward revision is driven by stronger-than-expected growth in the U.S., countering trade disruptions from tariffs. U.S. GDP growth is projected to hit 2.2% in 2026, up from 2.1% the previous year.

World Bank Chief Economist Indermit Gill warns that while resilience to policy uncertainty has increased, economic dynamism is lacking, threatening public finance and credit markets. Growth in emerging markets and developing economies will see a slowdown, with China leading in fiscal stimulus and export reform. Overall, despite better prospects, growth is still slow, posing risks of stagnation in less developed regions.

(With inputs from agencies.)