Breaking news

World Bank Forecasts Global Economy To Grow 2.7% In 2025 And 2026, Marking A Period Of Stabilization

The global economy is projected to grow by 2.7% in 2025 and 2026, maintaining the same pace as in 2024, according to the latest report from the World Bank. This steady growth signals a phase of stabilization, with inflation and interest rates expected to gradually decrease.

For developing economies, growth is expected to remain resilient over the next two years, holding steady at around 4%. However, this growth is still constrained compared to pre-pandemic levels, raising concerns about the ongoing challenge of poverty reduction and broader development goals.

The World Bank highlighted that developing economies, which account for 60% of global growth, are likely to conclude the first quarter of the 21st century with the weakest long-term growth prospects since 2000. The first decade of the century saw remarkable growth, but the aftermath of the 2008 financial crisis, along with other global challenges, has slowed down progress.

Economic integration has weakened, as foreign direct investment (FDI) inflows and GDP share in developing economies are now roughly half of what they were in the early 2000s. Meanwhile, global trade restrictions have surged in 2024, with new barriers reaching five times the average of the 2010-2019 period. As a result, global economic growth has diminished, dropping from 5.9% in the 2000s to 5.1% in the 2010s, and now to 3.5% in the 2020s.

In a statement, Indermit Gill, the World Bank’s chief economist, expressed concern over the future challenges facing developing economies: “The next 25 years will be tougher than the last 25. Most of the factors that once boosted their rise have faded. In their place, we now face tough headwinds: high debt, weak investment, slow productivity growth, and the escalating costs of climate change.”

The report also noted the potential impact of US President-elect Donald Trump’s plan to implement a 10% tariff across a wide range of imports. This could further hinder an already sluggish global economic recovery.

However, there is still hope for stronger-than-expected growth if the world’s largest economies, particularly the US and China, regain momentum.

The increasing importance of developing economies is evident in the shifting global economic landscape. Developing nations now represent 45% of global GDP, up from just 25% in 2000. This growth is largely driven by rapid urbanization, industrialization, and technology adoption in regions like Asia, Africa, and Latin America.

Key factors fueling this expansion include the rise of the middle class, infrastructure development, and an expanding services sector. The World Bank reports that more than 40% of exports from developing economies now go to other developing nations, a significant increase from 20% in 2000. Additionally, these countries are becoming crucial sources of capital flows, remittances, and development aid to others.

M Ayhan Kose, the World Bank’s deputy chief economist, emphasized that developing economies must adopt bold, innovative policies to capitalize on new opportunities for cross-border cooperation amid a landscape shaped by policy uncertainty and escalating trade tensions.

FinTech’s Dominance In MENA: Three Strategic Drivers Behind Unyielding VC Success

Despite facing tightening global liquidity and macroeconomic headwinds, the FinTech sector continues to assert its leadership in the MENA region. In the first half of 2025, FinTech emerged as the most resilient and appealing arena for venture capital investments, proving its worth as a catalyst for financial innovation and inclusion.

Addressing Structural Financial Gaps

In many parts of MENA, a significant proportion of the population remains underbanked and underserved by traditional financial institutions. FinTech companies are uniquely positioned to address these persistent challenges by bridging critical access gaps and driving financial inclusion. With the proliferation of payment apps, digital wallets, and micro-lending platforms, investors have witnessed firsthand how these solutions pave the way for scalable growth and eventual exits. Early-stage momentum in the region is underscored by a doubling of pre-seed deals year-over-year, reinforcing the sector’s capacity for rapid innovation and sustainable expansion.

Highly Scalable and Replicable Business Models

One of the key factors behind FinTech’s dominance is the inherent scalability of its business models. Once the necessary infrastructure and regulatory approvals are in place, these models have demonstrated robust performance across borders. The first half of 2025 saw a marked acceleration in deal activity, with payment solutions leading the charge with 28 deals in MENA—a significant increase over the previous year. Lending platforms, in particular, experienced a meteoric 500% year-over-year increase in funding, emerging as the fastest-growing subindustry. Such replicability makes FinTech an attractive proposition for investors seeking high-growth opportunities in diverse markets.

Supportive Regulatory And Government Backing

The strategic support offered by key government initiatives in the UAE and Saudi Arabia has been instrumental in propelling the FinTech sector forward. Progressive frameworks, such as the UAE’s open finance and digital asset directives, coupled with Saudi Arabia’s live-testing sandboxes, have materially lowered entry barriers for startups. These measures not only foster innovation but also streamline the path to commercialization. Consequently, the combined efforts of these regulatory bodies have enabled the UAE and Saudi Arabia to account for 86% of MENA’s total FinTech funding in H1 2025.

The resilience of FinTech in MENA is not merely a reflection of contemporary market trends—it signals a fundamental shift in the region’s economic fabric. With an unwavering commitment to addressing real financial challenges, scalable and replicable business practices, and robust regulatory support, FinTech is setting the benchmark for sustainable innovation. As capital markets become increasingly discerning, this sector stands out as a beacon of long-term growth and transformative impact.

The Future Forbes Realty Global Properties

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter