World Bank Warns Over One-Quarter of Developing Economies Still Below Pre-Pandemic Income
The World Bank has reported that more than one in four developing economies, particularly low-income countries and those affected by fragility or conflict, still have per capita incomes below pre-pandemic levels, highlighting persistent inequalities in the global economic recovery.
According to the World Bank’s January Global Economic Prospects report, while nearly 90 per cent of advanced economies have surpassed their 2019 income levels, many emerging market and developing economies (EMDEs) continue to struggle to regain lost ground, reversing years of progress in living standards.
The report projects economic activity in Sub-Saharan Africa to rise slightly from 3.3 per cent in 2024 to 3.5 per cent in 2025, but warned that underlying weaknesses remain. Globally, the 2020s are expected to be the slowest decade for economic growth since the 1960s, with average GDP growth projected at 2.6 per cent in 2026 before a modest increase to 2.7 per cent in 2027.
The World Bank attributes the slowdown to long-term structural factors, including weak productivity growth, ageing populations in major economies, declining globalisation momentum, and lingering effects from previous crises such as the 2008 financial crash and the COVID-19 pandemic.
Developing nations face particular challenges, including high debt levels, limited fiscal space, climate risks, and uneven investment, which threaten job creation for expanding working-age populations. Without stronger economic dynamism, the report warns, many EMDEs may struggle to provide adequate employment opportunities.
The World Bank recommended comprehensive reforms to boost long-term growth, including diversifying trade, strengthening macroeconomic frameworks, removing structural bottlenecks and investing in infrastructure, education, and health.
Policymakers are also encouraged to create favorable business environments and mobilise private capital to meet significant investment needs.
The report highlighted near-term risks to the global economy including escalating trade tensions, tighter financial conditions and potential inflationary pressures.
While artificial intelligence adoption could support growth, the Bank emphasised the need for coordinated global efforts to improve trade, ease financing constraints and prevent a widening development gap that could leave millions in developing nations poorer for longer.
