Quarter of developing countries poorer than in 2019, World Bank finds | World Bank
The World Bank found that a quarter of countries in developing countries were poorer in 2019 than they were before the Covid outbreak.
The Washington-based organization said a large group of low-income countries, mostly in sub-Saharan Africa, had experienced a negative shock in the six years to the end of last year.
The bank said global growth had “lost gear” since the pandemic and the pace was now “insufficient to reduce extreme poverty and create jobs where they are needed most”.
The bank predicted that economic growth in emerging market and developing economies will slow to 4 percent next year from 4.2 percent last year.
The bank said global economic growth “remains more resilient than expected,” especially after the U.S. economy performed better than expected last year, but progress will likely moderate in 2026 as economies in developed and developing countries struggle to make progress.
The US economy is estimated to grow 2.1 percent in 2025 and 2.2 percent in 2026, following increases of 0.7 percent and 0.6 percentage points, respectively, compared to the bank’s last forecast in June. The bank’s research showed that the euro zones are lagging behind, growing by just 0.9 percent in 2025 and 1.2 percent in 2026.
Global growth is expected to remain broadly stable over the next two years, falling from 2.7 percent in 2025 to 2.6 percent in 2026, before returning to 2.7 percent in 2027, a modest upward revision from the June forecast.
Most of the one in four developing countries where average income is lower than in 2019 are exposed to wars and famine, delaying recovery from the pandemic, the report said. It was stated that recent increases in growth were insufficient to override the previous slump.
Indermit Gill, the bank’s chief economist, said: “These trends cannot be explained by bad luck alone. In many developing countries they reflect avoidable policy mistakes.”
Gill said developing world countries need to adhere to strict budget rules to lay the foundation for sustainable growth. He said the formula is similar for all countries that want to grow faster.
“To prevent recession and unemployment, governments in developing and developed economies must aggressively liberalize private investment and trade, rein in public consumption, and invest in new technologies and education,” he said.
Gill said the global economy had proven resilient, but could not accelerate growth to a level that would create jobs for young people, particularly the 1.2 billion under-16s expected to enter the job market in the next decade.
“With each passing year, the global economy has become less capable of delivering growth and seemingly more resilient to policy uncertainty,” he said. “But economic dynamism and resilience cannot be differentiated for a long time without fragmentation in public finances and credit markets.
“In the coming years, the world economy will grow more slowly than in the troubled 1990s, while carrying record levels of public and private debt.”
