World Bank sees resilient global growth in 2026 despite tariffs, but fading dynamism

• U.S. GDP growth is projected at 2.2% in 2026, up from 2.1% in 2025, with tax incentives offsetting tariff drags on investment and consumption
• Emerging market and developing economy growth will slow to 4.0% in 2026 from 4.2% in 2025, while China's growth decelerates to 4.4% from 4.9% due to fiscal stimulus and non-U.S. export diversification
• The World Bank warns that economic resilience and dynamism 'cannot diverge for long without fracturing public finance and credit markets,' with current growth rates insufficient to prevent stagnation in developing countries

World Bank Global Growth Forecast Summary

Key Findings

The World Bank projects global GDP growth will slightly decelerate to 2.6% in 2026 from 2.7% in 2025, before recovering to 2.7% in 2027. Both 2025 and 2026 forecasts represent upward revisions from June predictions—up 0.4 percentage points and 0.2 percentage points respectively.

Regional Breakdown

United States: Expected to grow 2.2% in 2026 (up from 2.1% in 2025), driven by increased tax incentives that will partially offset tariff impacts on investment and consumption. Approximately two-thirds of the global upward revision stems from stronger-than-expected U.S. performance despite trade disruptions.

China: Growth forecast at 4.4% in 2026, down from 4.9% in 2025, though both figures are 0.4 percentage points higher than June estimates due to fiscal stimulus and export diversification away from U.S. markets.

Emerging Markets/Developing Economies: Growth will slow to 4.0% in 2026 from 4.2% in 2025. Excluding China, growth remains flat at 3.7% for both years.

Market Implications

The World Bank warns that despite resilience, the 2020s are on track to become the weakest decade for global growth since the 1960s. Chief Economist Indermit Gill cautioned that growth is overly concentrated in advanced economies and insufficient to reduce extreme poverty or prevent stagnation in developing nations.

The report highlights concerning divergence between economic resilience and dynamism, warning this gap threatens public finance and credit markets. Growth rates remain too weak to address joblessness and economic stagnation in emerging markets, posing long-term structural challenges for global economic stability.