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The World Bank’s Global Economic Prospects report released on January 14 2026 revised its global growth projections upward to 2.6 percent for 2026 and 2.7 percent for 2027. This adjustment stems largely from stronger than expected performance in the United States which drove two thirds of the revision according to the assessment. Even with these gains the report cautioned that the current decade remains on course to deliver the weakest global growth since the 1960s while widening gaps in living standards leave many developing economies below 2019 per capita income levels.
Growth in GCC countries is projected to reach 4.4 percent in 2026 and 4.6 percent in 2027 the World Bank report stated. The broader MENAP region including the UAE is expected to expand by 3.6 percent in 2026 before improving to 3.9 percent the following year. These figures follow a 2025 in which temporary trade surges and supply chain adjustments provided a lift to global activity that is set to moderate.
Global inflation is projected to decline to 2.6 percent in 2026 reflecting softer labour markets and reduced energy prices according to the report. Growth in developing economies is anticipated to slow to 4 percent in 2026 from 4.2 percent the previous year before edging up to 4.1 percent in 2027. Low income countries are forecast to post an average of 5.6 percent expansion over the two years supported by recovering demand and exports the World Bank data shows.
Indermit Gill the World Bank’s Chief Economist and Senior Vice President for Development Economics said “With each passing year the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty.” The assessment noted that per capita income growth in developing economies would stand at 3 percent in 2026 roughly one percentage point below the 2000 to 2019 average. Such trends are expected to intensify pressures to create jobs for 1.2 billion young people reaching working age in those economies over the coming decade according to World Bank projections.
The report emphasised the need for comprehensive policies focused on building physical digital and human capital improving regulatory certainty and scaling up private investment to address these challenges. It also examined the role of fiscal rules in restoring sustainability after overlapping shocks increased debt servicing costs in many countries. M. Ayhan Kose Deputy Chief Economist and Director of the World Bank’s Prospects Group stated “With public debt in emerging and developing economies at its highest level in more than half a century restoring fiscal credibility has become an urgent priority.”
The UAE has continued to record robust non oil expansion in the period leading up to the forecast with that sector growing 5.3 percent in the first quarter of 2025 to AED 352 billion according to the Ministry of Economy. Overall real GDP rose 3.9 percent in the same quarter compared with the prior year as diversification into trade manufacturing and financial services gained momentum ministry figures indicate. World Bank assessments from later in the year placed full year 2025 growth at 5.6 percent before projecting a slowdown in 2026 amid regional disruptions although non oil activity is expected to remain the primary driver of expansion.
