However, the agency noted that US growth could also increase by 0.4 percentage points in 2026 if the US tax cuts are extended, with only small secondary effects on the world.
Trump, who will take office on Monday, has proposed a 10% tariff on global imports, a punitive 25% tariff on imports from Canada and Mexico until they clamp down on drugs and migrants crossing the borders into United States, and one of 60% to Chinese products.
The World Bank’s latest World Economic Outlook, published twice a year, forecasts flat global economic growth of 2.7% in 2025 and 2026, the same as in 2024, and warns that developing economies now face its weakest long-term growth prospects since 2000.
The multilateral development bank said foreign direct investment in developing economies was now about half of what was seen in the early 2000s and global trade restrictions were five times higher than the 2010-2019 average.
Growth in developing countries is expected to reach 4% in 2025 and 2026, much lower than pre-pandemic estimates, due to high debt burdens, weak investment and slow productivity growth , along with the rising costs of climate change.
“The next 25 years will be more difficult for developing economies than the last 25,” Indermit Gil, chief economist of the World Bank, said in a statement, urging countries to adopt domestic reforms to encourage investment and deepen trade relations. .
Economic growth in developing countries fell from almost 6% in the 2000s to 5.1% in 2010 and was around the 3.5% average in 2020, according to the Bank.
It also noted that the gap between rich and poor countries was widening, with average per capita growth rates in developing countries, excluding China and India, averaging half a percentage point lower than in rich economies since 2014.
