A quarter of developing countries are poorer today than they were before the Covid-19 pandemic, according to new findings from the World Bank.
The Washington-based institution said many low-income countries, particularly in sub-Saharan Africa, have suffered a prolonged economic setback over the past six years, leaving average incomes below 2019 levels.
In its latest outlook, the World Bank said global economic growth has “downshifted” since the pandemic and is now too weak to significantly reduce extreme poverty or create enough jobs in the world’s poorest regions.
Growth across emerging market and developing economies is expected to slow from 4.2% this year to 4% next year, the report said.
While the global economy has proved more resilient than previously expected, the World Bank warned that progress would remain modest in 2026 as both developed and developing economies struggle to gain momentum.
The US economy was a notable bright spot. The World Bank estimated that the US grew by 2.1% in 2025 and would expand by 2.2% in 2026, following upgrades to its earlier forecasts.
By contrast, the eurozone was described as a laggard, with growth of just 0.9% expected in 2025 and 1.2% in 2026.
Overall global growth is projected to remain broadly stable, easing slightly from 2.7% in 2025 to 2.6% in 2026, before returning to 2.7% in 2027. This marks a small upward revision from the Bank’s June forecast.
The report said many of the developing countries now poorer than in 2019 have been hit by wars, famines and political instability, which have slowed their recovery from the pandemic. In several cases, recent growth has been too weak to offset earlier economic losses.
Indermit Gill, the World Bank’s chief economist, said the situation could not be blamed on bad luck alone.
“In far too many developing countries, these trends reflect avoidable policy mistakes,” he said.
Gill argued that governments in developing economies must adopt strict budget discipline to support sustainable growth, adding that the basic formula for faster growth was broadly similar across countries.
“To avert stagnation and joblessness, governments in emerging and advanced economies must aggressively liberalise private investment and trade, rein in public consumption, and invest in new technologies and education,” he said.
He warned that although the global economy has shown resilience, it has failed to generate growth at a level needed to absorb young workers, particularly the estimated 1.2 billion people under the age of 16 expected to enter the labour market over the next decade.
“With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty,” Gill said. He added that this imbalance could eventually strain public finances and credit markets.
The World Bank further warned that the world economy is set to grow more slowly over the coming years than it did during the troubled 1990s, while carrying record levels of public and private debt.
China’s economy is forecast to grow by 4.4% this year and 4.2% next year. While these figures represent an upgrade from earlier estimates, they remain the lowest growth rates in 35 years and below both the 2025 estimate of 4.9% and the Communist Party’s long-standing 5% target.
