In the latest edition of the "Global Economic Prospects," the World Bank stated that despite high trade tensions and policy uncertainties, the global economy's "resilience" is stronger than expected and upgraded its growth outlook for the next two years.
Forecast Upgrade: 2.6% in 2026, Driven by the US
The report predicts global economic growth will slow to 2.6% in 2026 and rebound to 2.7% in 2027; the overall trajectory has been revised upward compared to last June's forecast. The World Bank claims that about two-thirds of this upgrade comes from stronger-than-expected growth in the United States, with the 2026 US GDP growth forecast raised to 2.2%.
Source of "Resilience": Preemptive Trade, Supply Chain Reconfiguration, and Fiscal Buffers
The World Bank noted that 2025 growth is supported by two factors: a surge in external demand due to preemptive trade actions ahead of policy changes and the rapid reconfiguration of global supply chains. Looking into 2026, these short-term boosts are expected to weaken, but easing financial conditions and fiscal expansion in some large economies may offset the downside. Meanwhile, global inflation is projected to slightly decline to 2.6% in 2026.
Risks Tilt Downward: Growth Not Fast Enough, Uneven Recovery Widening Gaps
The World Bank emphasized in the report and statement that if the current forecasts hold, the 2020s could be the weakest decade for global growth since the 1960s. Of more concern is the "divergence": by the end of 2025, per capita incomes in almost all developed economies will have exceeded 2019 levels, but about a quarter of developing economies will still be below 2019 levels.
The report also warns of the risk of renewed escalation in trade tensions, with higher tariffs potentially leading to export redirections and a rise in protectionism in third countries, thereby increasing uncertainty.
Regional and Key Numbers: Emerging Markets Slowdown, Divergence Between China and Europe/Japan
According to the World Bank, growth in developing economies is expected to slow to 4.0% in 2026; China's growth for 2026 is forecast at 4.4% (down from 4.9% in 2025), but this forecast has also been revised upward compared to last June. The eurozone and Japan face more pronounced slowdown pressures.
Next Stop: IMF's Latest Forecast to Be Released
For investors, attention can be directed towards whether tariff and trade policy paths disrupt data again, and whether the upcoming "World Economic Outlook" update from the IMF, to be released on January 19th, echoes the World Bank's assessment of "resilience but low growth velocity."
