For the third year in a row, developing economies paid more in debt service than they received in new financing, hitting a 50-year high in debt outflows during 2022-2024. This is according to the World Bank‘s 2025 Year in Review.
Despite these major challenges, the World Bank pointed out that the global economy performed better than many had expected, particularly in developing countries.
It said global growth surpassed forecasts even amid tariffs and trade tensions, with some relief as bond markets reopened and interest rates began to ease.
It added that the decreasing trade-policy uncertainty and stable energy markets also contributed.
“Forecasters now anticipate growth of about 2.7% for this year, generally in line with expectations at the start of 2025.
This resilience was fuelled by rapid adaptation, including the shifting of supply chains, fast adoption of digital technologies like artificial intelligence (AI), and diversified markets, it mentioned.
Against this backdrop, the World Bank Group continued to work with countries to create the conditions for progress, opportunity, and resilience, with a focus on one powerful lever: jobs.
“This was our year of job creation, as we placed it at the centre of our development efforts. Jobs are not only the surest path out of poverty but also provide dignity, hope, and stability.
They build self-sufficient economies, reduce humanitarian need, and drive demand for goods, helping ensure that development is both sustainable and thriving, it stated.
The World Bank also expressed concern about the greatest demographic shifts.
Over the next decade, it pointed out that 1.2 billion young people in developing countries will reach working age, shaping the next century.
“Ensuring there are enough jobs for them is critical: this demographic dividend could catalyse the global economy. But a lack of opportunities could fuel instability, unrest, and mass migration, with implications for every region and economy,” it indicated.
