World Bank: 2025 Marks End Of Post-COVID Global Recovery
World Bank Says 2025 Completed Post-Recession Recovery
THE World Bank says the global economy demonstrated notable resilience in 2025, capping a five-year recovery from the deep recession triggered by the COVID-19 pandemic in 2020, despite rising trade tensions and policy uncertainty.
In a blog post summarising its latest Global Economic Prospects report, the World Bank noted that global activity last year was supported by stockpiling of goods ahead of tariff increases, strong investor risk appetite, and a surge in artificial intelligence-related investments across major economies.
Growth Outlook Moderates After 2025
According to the report, global growth is expected to slow to 2.6 per cent in 2026 as temporary growth drivers fade, including weaker demand for traded goods and softer domestic demand in key economies. By 2027, growth is projected to edge up slightly to 2.7 per cent, supported by earlier monetary easing and improved trade conditions amid easing uncertainty.
The World Bank said global growth projections were revised upward by 0.4 percentage points for 2025 and 0.2 points for 2026 compared with earlier estimates, largely due to stronger-than-expected performance in major economies.
Trade Tensions and Tariffs Remain a Drag
The report highlighted the impact of trade policy shifts, particularly in the United States, where the average effective tariff rate rose to about 17 per cent by late 2025—the highest level since the 1930s.
While goods shipments surged earlier in the year as firms rushed to beat tariff hikes, US imports slowed sharply in the second half of 2025, particularly from countries facing higher tariffs. As a result, growth in global goods and services trade is projected to slow from 3.4 per cent in 2025 to 2.2 per cent in 2026.
The World Bank warned that risks to the outlook remain tilted to the downside, especially if trade tensions escalate further or global financial sentiment deteriorates.
Jobs Challenge for Developing Economies
Against this backdrop, the World Bank said emerging markets and developing economies (EMDEs) continue to lag behind advanced economies and face a major employment challenge. An estimated 1.2 billion young people are expected to enter the working-age population over the next decade.
To address this, the Bank identified three policy priorities: investing in infrastructure and digital connectivity; strengthening education and skills development; and improving governance and business environments to attract private investment.
Jobs at the Core of Development Strategy
The World Bank reiterated that job creation remains central to poverty reduction and long-term economic stability. Since 2019, its jobs-focused programmes have benefited about 77 million people globally, particularly in low-income countries.
The institution said it is intensifying efforts to help countries convert economic growth into sustainable, inclusive employment, with a strong focus on women and youth.
