The World Bank Just Cut Its Global Growth Forecast, and Poorer Countries Are Taking the Hit Hardest

Keypoints:

• The World Bank now projects global growth slowing to 2.5% in 2026
• Emerging markets and developing economies face their weakest per capita income growth since the pandemic
• The Middle East, North Africa, Afghanistan, and Pakistan region is the hardest hit
• Low-income countries' growth forecast was cut to 5.4%, down 0.3 percentage points
• Growth is projected to recover across all regions in 2027-28 as energy prices ease

The World Bank's latest Global Economic Prospects report projects global growth slowing to 2.5% in 2026, with the steepest damage landing on emerging markets and developing economies rather than wealthier nations. 

Those countries now face their weakest per capita income growth since the pandemic, a gap the report ties directly to sharp energy price increases and renewed inflationary pressure working through the global economy this year.

The regional breakdown shows how unevenly that pressure is spreading. The Middle East, North Africa, Afghanistan, and Pakistan region is taking the hardest hit, while South Asia is holding up comparatively better than its neighbors. Low-income countries saw their own growth forecast trimmed to 5.4%, a cut of 0.3 percentage points from earlier projections, a meaningful downgrade for economies with far less room to absorb higher energy costs than wealthier nations do.

The report isn't entirely pessimistic about what comes next. It projects a recovery across every region in 2027-28, as energy supplies stabilize and global trade activity strengthens back toward its earlier pace. 

The World Bank flagged real risks to that recovery timeline too, including further commodity market disruption, financial stress, and continued trade policy uncertainty, while noting one genuine upside factor working in the opposite direction: broader AI adoption could meaningfully lift global economic activity beyond what current forecasts assume.