Global Economic Growth Stalls: World Bank Projects Slowest Decade Since the 1960s
Washington D.C. – The global economy is facing a period of prolonged sluggishness, according to the World Bank’s latest outlook report. The report, released today, paints a picture of resilience masking underlying weakness, projecting growth rates that could mark the slowest decade since the 1960s. This is urgent news for investors, policymakers, and anyone concerned about the future of global prosperity.
Image: Illustrative chart depicting slowing global economic growth.
A Decade of Diminished Returns?
The World Bank estimates global economic growth at 2.7% in 2025, inching up to 2.6% in 2026 before a slight recovery to 2.7% in 2027. While recent revisions show a minor upward adjustment for 2026 and 2027, the overall trend is undeniably downward. This isn’t a collapse, but a concerning stagnation. The report emphasizes that this “resilience” isn’t driven by robust new growth engines, but rather by defensive maneuvers to withstand existing pressures.
A key factor bolstering activity in 2025 was a surge in inventory accumulation as companies braced for trade tensions and potential tariffs. This temporary boost is expected to fade, revealing the underlying fragility. Increased risk appetite in markets and investment in artificial intelligence also provided some support, but these are concentrated areas, not broad-based drivers.
Latin America: A Persistent Struggle
For Latin America, the outlook is particularly sobering. The region is projected to grow 2.3% in 2026 and 2.6% in 2027 – figures that, while slightly improved, fail to close the gap with more advanced economies. The fundamental challenge remains boosting long-term growth capacity. This isn’t a new story; it’s a continuation of a frustrating pattern. The region benefits from favorable financing conditions and high commodity prices for exporters, but these are offset by trade uncertainties, subdued consumption, and fiscal constraints.
The Caribbean presents a brighter, albeit concentrated, picture. Guyana’s oil boom is driving significant growth (5.2% in 2026 and 6.6% in 2027), but excluding Guyana, the region’s growth is a more modest 2.9% and 3.7% respectively, relying heavily on tourism. Central America is expected to maintain stable growth around 3.6-3.7%, but faces headwinds from declining remittance flows.
Colombia’s Moderate Path
Colombia’s economy is projected to grow 2.6% in 2026 and 2.8% in 2027, following a 2.6% expansion in 2025. This places Colombia firmly in the middle of the Latin American pack. It’s a story of stabilization rather than rapid advancement. Resilient consumption and a gradual recovery of private investment, contingent on falling inflation and interest rate cuts, are expected to support growth. However, policy uncertainty remains a significant drag on investment.
Navigating the Risks: What Could Go Wrong?
The World Bank identifies several potential risks that could derail even these modest forecasts. A restrictive review of trade agreements like USMCA and T-MEC, particularly impacting Mexico, could disrupt supply chains. A global slowdown could depress commodity prices, hurting exports and government revenues. And the potential return of a La Niña climate pattern raises the specter of droughts in South America, impacting agriculture. On the brighter side, the adoption of artificial intelligence could boost digital investment and productivity, though potential job displacement remains a concern.
This report isn’t predicting a crisis, but it’s a stark warning. The world is adapting to a “new normal” of slow growth and persistent uncertainty. As Indermit Gill, Chief Economist of the World Bank Group, aptly put it, the global economy is becoming “less capable of generating growth and, apparently, more resistant to political uncertainty.” Understanding these dynamics is crucial for businesses, investors, and policymakers alike. Staying informed with the latest economic analysis, like that provided by the World Bank and reported here on Archyde.com, is more important than ever.
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