World Bank Raises Outlook as Global Economy Proves Resilient
The World Bank has increased its growth forecast for this year, noting that the global economy has demonstrated an unexpected resilience amid a “historic” rise in trade tensions. The Washington-based lender reported on Tuesday that real gross domestic product is now expected to increase by 2.6 per cent in 2026, an upward revision from the June forecast of 2.4 per cent. The US economy experienced a significant increase, with an estimated growth of 2.2 percent this year, up from a previous forecast of just 1.6 percent.
The new 2026 global forecasts indicate a slight deceleration from the stronger growth observed in 2025, which exceeded the lender’s expectations. The World Bank reported that a surge in trade occurred as companies and households hurried to acquire goods in anticipation of US President Donald Trump’s tariffs. This was coupled with a lesser impact from the elevated import levies and an increase in intelligence spending, contributing to an estimated world growth of 2.7 percent last year. “Global growth is becoming range-bound. There is resilience, but growth is not accelerating,” said Ayhan Kose highlighting that real GDP growth has remained between 2.6 per cent and 2.8 per cent since 2023, in contrast to an average of 3.2 per cent in the decade preceding the pandemic.
The lender is aligning its projections for 2025 with those of the International Monetary Fund. The IMF raised its projections for the previous year in October, while cautioning about potential strains on the horizon. Fresh forecasts are set to be provided on Monday. In its report, the World Bank stated that the world economy’s resilience has been “notable,” yet risks continue to lean towards the downside. “There is a significant risk that trade tensions could re-escalate, especially as higher tariffs could redirect exports to third countries, leading domestic producers in those countries to seek protection from increased import competition,” the institution stated.
The report from the World Bank also revealed: China is projected to achieve a growth rate of 4.9 per cent in 2025 and 4.4 per cent in 2026, with both figures revised upward from earlier estimates. In 2026, global inflation is projected to decrease to 2.6 per cent, which is 0.3 percentage points lower than earlier forecasts. Brent crude oil prices are anticipated to decrease to $60 per barrel in 2026, down from an average of $69 in 2025. Job creation continues to be a focal point, as 1.2 billion young individuals are set to enter the workforce in emerging markets within the next ten years.
