The World Bank has projected that Sub-Saharan Africa economy growth is expected to edge up to 3.7 percent in 2025 and average 4.2 percent in 2026–27.
The Bank attributed the development to heightened trade tensions and policy uncertainty, which it said are expected to drive global growth down this year to its slowest pace since 2008 outside of outright global recessions.
This is according to the World Bank’s latest Global Economic Prospects report.
The Bank said the turmoil has resulted in growth forecasts being cut in nearly 70 percent of all economies—across all regions and income groups.
It highlighted that Global growth is projected to slow to 2.3 percent in 2025, nearly half a percentage point lower than the rate that had been expected at the start of the year.
The Bank added that a global recession is not expected, nevertheless, if forecasts for the next two years materialize, average global growth in the first seven years of the 2020s will be the slowest of any decade since the 1960s.
Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics said, “Outside of Asia, the developing world is becoming a development-free zone. It has been advertising itself for more than a decade. Growth in developing economies has ratcheted down for three decades—from 6 percent annually in the 2000s to 5 percent in the 2010s—to less than 4 percent in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5 percent in the 2000s to about 4.5 percent in the 2010s—to less than 3 percent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels.”
Forecasts weakest global growth decade since 1960s
Growth is expected to slow in nearly 60 percent of all developing economies this year, averaging 3.8 percent in 2025 before edging up to an average of 3.9 percent over 2026 and 2027. That is more than a percentage point lower than the average of the 2010s. Low-income countries are expected to grow 5.3 percent this year—a downgrade of 0.4 percentage point from the forecast at the start of 2025.
Tariff increases and tight labour markets are also exerting upward pressure on global inflation, which, at a projected average of 2.9 percent in 2025, remains above pre-pandemic levels.
Slowing growth will impede developing economies in their efforts to spur job creation, reduce extreme poverty, and close per capita income gaps with advanced economies.
Per capita income growth in developing economies is projected to be 2.9 percent in 2025—1.1 percentage points below the average between 2000 and 2019.
Assuming developing economies other than China are able to sustain an overall GDP growth of 4 percent—the rate forecast for 2027—it would take them about two decades to return to their pre-pandemic trajectory with respect to economic output.
Global growth could rebound faster than expected if major economies are able to mitigate trade tensions—which would reduce overall policy uncertainty and financial volatility.
The analysis finds that if today’s trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, global growth would be 0.2 percentage point stronger on average over the course of 2025 and 2026.
The World Bank’s Deputy Chief Economist and Director of the Prospects Group M. Ayhan Kose said, “Emerging-market and developing economies reaped the rewards of trade integration but now find themselves on the front lines of a global trade conflict.
“The smartest way to respond is to redouble efforts on integration with new partners, advance pro-growth reforms, and shore up fiscal resilience to weather the storm. With trade barriers rising and uncertainty mounting, renewed global dialogue and cooperation can chart a more stable and prosperous path forward.”
The report argues that in the face of rising trade barriers, developing economies should seek to liberalize more broadly by pursuing strategic trade and investment partnerships with other economies and diversifying trade—including through regional agreements.
Given limited government resources and rising development needs, policymakers should focus on mobilizing domestic revenues, prioritizing fiscal spending for the most vulnerable households, and strengthening fiscal frameworks.
The Bank said, to accelerate economic growth, countries will need to improve business climates and promote productive employment by equipping workers with the necessary skills and creating the conditions for labour markets to efficiently match workers and firms.
It added that global collaboration will be crucial in supporting the most vulnerable developing economies, including through multilateral interventions, concessional financing, and, for countries embroiled in active conflicts, emergency relief and support.
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