The report said Sub-Saharan Africa’s growth was expected to edge up to 3.7 per cent in 2025 and average 4.2 per cent in 2026–27.

“Heightened trade tensions and policy uncertainty are expected to drive global growth down this year to its slowest pace since 2008 out­side of outright global recessions,” the report said.

The report said the turmoil had resulted in growth forecasts being cut in nearly 70 per cent of all economies—across all regions and income groups.

However, the report said a global recession was not expected.

It said growth was expected to slow in nearly 60 per cent of all developing economies this year, av­eraging 3.8 per cent in 2025 before edging up to an average of 3.9 per cent over 2026 and 2027.

“Low-income countries are expected to grow 5.3 per cent this year—a downgrade of 0.4 percent­age point from the forecast at the start of 2025. Tariff increases and tight labor markets are also exerting upward pressure on global inflation, which, at a projected average of 2.9 per cent in 2025, remains above pre-pandemic levels,” the report said.

It stated that slowing growth would impede developing econ­omies in their efforts to spur job creation, reduce extreme poverty, and close per capita income gaps with advanced economies.

“Per capita income growth in developing economies is projected to be 2.9 per cent in 2025—1.1 percentage points below the aver­age between 2000 and 2019,” the report added.

It said assuming developing economies other than China were able to sustain an overall Gross Domestic Product growth of 4 per­cent—the rate forecast for 2027—it would take them about two decades to return to their pre-pandemic trajectory with respect to economic output.

“Global growth could rebound faster than expected if major economies are able to mitigate trade tensions—which would reduce overall policy uncertainty and finan­cial volatility.

The report asserts that if today’s trade disputes were resolved with agreements that halve tariffs relative to their levels in late May, global growth would be 0.2 percentage point stronger on average over the course of 2025 and 2026.

It argues that in the face of rising trade barriers, developing economies should seek to liberalise more broadly by pursuing strategic trade and investment partnerships with other economies and diver­sifying trade—including through regional agreements.

The report said given limited government resources and rising development needs, policymakers should focus on mobilising do­mestic revenues, prioritising fiscal

 spending for the most vulnerable households, and strengthening fiscal frameworks.

To accelerate economic growth, the report said countries would need to improve business climates and promote productive employ­ment by equipping workers with the necessary skills and creating the conditions for labor markets to efficiently match workers and firms.

“Global collaboration will be crucial in supporting the most vulnerable developing economies, including through multilateral in­terventions, concessional financing, and, for countries embroiled in active conflicts, emergency relief and support,” the report said.

The World Bank Group’s Chief Economist and Senior Vice Presi­dent for Development Economics, Indermit Gill, commenting on the report said “Outside of Asia, the developing world is becoming a development-free zone.”

“Growth in developing econo­mies has ratcheted down for three decades—from 6 per cent annually in the 2000s to 5 per cent in the 2010s—to less than 4 per cent in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5 per cent in the 2000s to about 4.5 per cent in the 2010s—to less than 3 per cent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels,” the Group Chief Economist said.