The global economy will have to grow by 2.7% in 2025-26 and by 4% in developing countries

The world economy will have to grow by 2.7% in 2025 and 2026, while that of developing countries will have to settle at 4% during this period, according to forecasts from the World Bank, published Thursday.

However, this will be a weaker performance than before the pandemic, notes the WB, which judges these rates “insufficient” to foster the progress needed to reduce poverty and achieve broader development goals.

The report from the Washington-based international financial institution notes that developing economies, “which contribute 60% to global growth”, should end the first quarter of the 21st century with long-term growth prospects “lowest since 2000”.

The Bretton Woods institution, which reported growth during the first decade of the current century “stronger than in the 1970s”, noted a decline in the following ten years of growth in developing economies, weighed down by the effects of the 2008 financial crisis.

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“The next 25 years will be more difficult for developing economies than the last 25”, said Indermit Gill, chief economist and senior vice-president for development economics at the WB, quoted in the report.

Highlighting the growing importance of developing economies for the global economy, the WB said that they represent around 45% of global GDP, compared to 25% in 2000.

The interdependence of these economies has also increased, according to the financial institution, which reports that more than 40% of their exports of goods go to other developing economies, double the share recorded in 2000 .

The World Bank warns that developing economies could face serious challenges over the next two years, particularly declining investor confidence, rising trade tensions, and persistent inflation.

However, with the implementation of the right policies, these savings can “transform certain challenges into significant opportunities”, through an adequate response to infrastructure needs, the acceleration of the climate transition and the improvement of human capital, concludes the WB.

With MAP