The World Bank said on Tuesday that the global economy is holding up better than expected, nudging up its 2026 growth forecast, but warning that gains are largely confined to advanced economies and remain too modest to make a dent in extreme poverty.
Global gross domestic product (GDP) growth is estimated to slow slightly to 2.6% this year from 2.7% in 2025 before edging back to 2.7% in 2027, the World Bank's semi-annual Global Economic Prospects report showed.
The 2026 GDP forecast is up two-tenths of a percentage point from the last predictions released in June, while 2025 growth will exceed the prior forecast by four-tenths of a percentage point.
The World Bank said about two-thirds of the upward revision reflects better-than-expected growth in the U.S. despite tariff-driven trade disruptions. It predicts U.S. GDP growth will reach 2.2% in 2026, compared to 2.1% in 2025 – up two-tenths and half a percentage point from the June forecasts, respectively.
After an import surge to beat tariffs early in 2025 held back U.S. growth for that year, bigger tax incentives will aid growth in 2026, offset by the drag of tariffs on investment and consumption, the World Bank said.
But if the current forecasts hold, the 2020s are on track to be the weakest decade for global growth since the 1960s and too low to avert stagnation and joblessness in emerging market and developing countries, the global lender said.
"With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty," Indermit Gill, the World Bank's chief economist, said in a statement. "But economic dynamism and resilience cannot diverge for long without fracturing public finance and credit markets."
Gill added that global GDP per person in 2025 was 10% higher than on the eve of the COVID-19 pandemic – marking the fastest recovery from a major crisis in the past 60 years. But he said many developing countries are being left behind, with a quarter of them saddled with lower per-capita incomes than in 2019, particularly the poorest countries.
Growth in emerging markets and developing economies will slow to 4.0% in 2026 from 4.2% in 2025, up two-tenths and three-tenths of a percentage point from the June forecasts, respectively. But excluding China, the 2026 growth rate for this group will be 3.7%, unchanged from 2025, the World Bank said.
China's growth will slow to 4.4% in 2026 from 4.9%, but the forecasts are both up four-tenths of a percentage point from June due to fiscal stimulus and increased exports to non-U.S. markets.
Growth in the eurozone is set to slow to 0.9% in 2026 from 1.4% in 2025 due to the drag from U.S. tariffs but recover to 1.2% in 2027 due to increases in European defense spending, the World Bank said.
Japan's outlook is much the same for 2026, with growth slowing to 0.8% after a rise of 1.3% in 2025, a year aided by the front-loading of exports to the U.S. to beat President Donald Trump's tariffs. But slower consumption and investment in Japan will keep GDP growth unchanged at 0.8% for 2027, the World Bank said.
