Quarter of developing countries poorer than in 2019, World Bank finds

A quarter of countries in the developing world are poorer than they were in 2019 before the Covid pandemic, the World Bank has found.The Washington-based organisation said a large group of low-income countries, many in Sub-Saharan Africa, had suffered a negative shock in the six years to the end of last year.The bank said global growth had “downshifted” since the pandemic, and the pace was now “insufficient to reduce extreme poverty and create jobs where they’re needed most”.Economic growth in emerging market and developing economies was estimated to slow from 4.2% last year to 4% next year, the bank said.Global economic growth was “proving more resilient than anticipated”, the Bank said, especially after a better-then-expected performance by the US economy last year, but progress was likely to be modest in 2026 as economies in the developed and the developing world struggled to make progress.The US economy was estimated to have grown by 2.1% in 2025 and 2.2% in 2026 after upgrades of 0.7 and 0.6 percentage points respectively from the bank’s last forecast in June. The bank’s study showed the euro areas as a laggard, growing by just 0.9% in 2025 and 1.2% in 2026.Global growth is projected to remain broadly steady over the next two years, easing from 2.7% in 2025 to 2.6% in 2026 before returning to 2.7% in 2027, a modest upward revision from the June forecast.Many of the one in four developing countries where average incomes are lower than in 2019 have endured wars and famines, the report said, which has delayed their recovery from the pandemic. More recent increases in growth have been insufficient to override a previous slump, it said.Indermit Gill, the Bank’s chief economist, said: “These trends cannot be explained by misfortune alone. In far too many developing countries, they reflect avoidable policy mistakes.”Gill said developing world countries needed to stick to strict budget rules to provide a foundation for sustainable growth. He said the formula was similar for all countries that wanted to grow at a faster pace.“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.Gill said the global economy had proved to be resilient, but unable to jump-start growth to a level that would create jobs for young people, especially the 1.2 billion under-16s expected to enter the jobs market in the next decade.“With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty,” he said. “But economic dynamism and resilience cannot diverge for long without fracturing public finance and credit markets.“Over the coming years, the world economy is set to grow slower than it did in the troubled 1990s, while carrying record levels of public and private debt.”