Washington, Jan 13 (NationPress) The global economy is demonstrating a surprising level of resilience despite facing historic trade tensions and policy uncertainty, with growth anticipated to remain relatively stable over the next two years, according to the World Bank's latest findings.

In its recent report titled Global Economic Prospects, the World Bank forecasts that global growth will ease to 2.6 percent in 2026, before slightly increasing to 2.7 percent in 2027, marking an upward adjustment from previous estimates.

This unexpectedly robust performance is attributed to strong growth in the United States, which contributes approximately two-thirds of the upward revision to the 2026 forecast, as highlighted in the report.

Despite this resilience, the World Bank cautioned that if current projections are accurate, the 2020s could be the weakest decade for global growth since the 1960s. The slow growth is exacerbating income disparities, with nearly all advanced economies surpassing their pre-pandemic income levels, while one in four developing economies still lags behind 2019 levels.

The projected growth for 2025 is bolstered by preemptive trade activities before policy shifts, swift adjustments in supply chains, and improving financial conditions. However, these supporting factors are expected to diminish in 2026 as trade and domestic demand begin to decline.

Global inflation is expected to fall to 2.6 percent in 2026, driven by softer labor markets and decreasing energy prices. Growth is anticipated to pick up in 2027 as trade dynamics adjust and policy uncertainty lessens.

Indermit Gill, the World Bank Group's Chief Economist and Senior Vice President for Development Economics, remarked, "With each passing year, the global economy has become less capable of generating growth while appearing more resilient to policy uncertainties." He expressed concerns that slower growth, combined with record public and private debt, risks destabilizing public finance and credit markets.

Gill urged governments to liberalize private investment and trade, reduce public consumption, and invest in technology and education to avert stagnation and rising unemployment.

The World Bank anticipates that growth in developing economies will slow to 4 percent in 2026, before increasing to 4.1 percent in 2027, fueled by easing trade tensions, stabilizing commodity prices, and improved financial conditions.

Low-income nations are forecasted to grow at an average rate of 5.6 percent during 2026-27, but this growth is unlikely to close the income gap with advanced economies.

The report also brought attention to the escalating jobs challenge, noting that 1.2 billion young individuals in developing nations will enter the workforce in the next decade. Tackling this issue will necessitate coordinated reforms aimed at enhancing productivity, improving business environments, and mobilizing private investment.

The World Bank further warned that the fiscal sustainability of many developing economies has been compromised by overlapping shocks and rising debt servicing costs.

M. Ayhan Kose, the World Bank Group’s Deputy Chief Economist, stated, "With public debt in emerging and developing economies at its highest in over fifty years, restoring fiscal credibility has become an urgent priority."