The global economy has once again defied expectations, proving resilient in the face of trade tensions, wars and policy uncertainty, but the recovery remains deeply uneven, with Africa and other developing regions still struggling to translate growth into rising living standards, according to the World Bank’s Global Economic Prospects, January 2026 report.
The World Bank estimates that global growth reached 2.7 percent in 2025 and is projected to ease slightly to 2.6 percent in 2026, before stabilising at 2.7 percent in 2027. Inflation has moderated across most economies, interest rates are gradually coming down, and financial conditions have eased, supporting activity.
“The global economy has proved to be surprisingly shock-proof since the pandemic,” the report notes, despite what it describes as “historically high policy uncertainty and steep tariff increases” over the past year.
Yet behind the headline resilience lies a more troubling reality. The World Bank cautions that the post-pandemic rebound, although the strongest global recovery in more than six decades, has been “disappointingly uneven.” While nearly 90 percent of advanced economies are now above their pre-pandemic per-capita income levels, more than one-quarter of emerging market and developing economies remain poorer than they were in 2019.
World Bank Group Chief Economist Indermit Gill warns that growth in the 2020s is failing to deliver broad-based progress. “Growth in the 2020s has hardly been the rising tide that lifts all boats,” Gill writes in the report’s foreword, adding that the current pace is “insufficient to reduce extreme poverty and create jobs where they’re needed most”.
For Sub-Saharan Africa, the outlook is cautiously positive but constrained. The region’s economy is projected to expand by 4.0 percent in 2025, rising to 4.3 percent in 2026 and 4.5 percent in 2027—faster than the global average but still modest given rapid population growth.
The report stresses that higher headline growth does not automatically translate into better living standards. “Without stronger economic dynamism, many EMDEs will struggle to create enough jobs for expanding working-age populations,” it states, highlighting Africa’s looming employment challenge.
Fiscal constraints remain a major concern across the continent. Government debt in developing economies is now at a 55-year high, limiting the ability of states to respond to shocks or invest in growth-enhancing sectors. The World Bank points to fiscal rules and stronger institutions as key tools to rebuild credibility and restore policy space.
Although Botswana is not singled out with a standalone forecast, the report’s analysis of commodity-exporting African economies carries clear implications. Weaker global trade growth—projected to slow from 3.4 percent in 2025 to 2.2 percent in 2026—and falling oil and commodity prices are expected to weigh on export revenues across resource-dependent economies.
At the same time, easing inflation and improving financial conditions could support private investment if domestic policy frameworks remain stable. The World Bank argues that countries like Botswana will need to diversify their economies, strengthen fiscal discipline, and mobilise private capital to sustain growth over the medium term.
Looking ahead, the report underscores that resilience alone will not be enough. “It would be dangerous to assume that the danger has passed,” Gill cautions, warning that today’s stability has relied on temporary factors such as stockpiling and fiscal loosening rather than durable structural strength.
As global growth cools and trade headwinds persist, the World Bank’s message is clear: the next phase of recovery will depend less on surviving shocks, and more on sound policy choices, fiscal discipline and job-creating reforms, particularly in Africa and other developing regions.
