Recent data releases from the International Monetary Fund and the World Bank highlight significant shifts in the global economic landscape, with implications for developing economies across multiple regions.
The World Bank's June 2026 Global Economic Prospects report projects global growth to slow to 2.5 percent in 2026, down from 2.9 percent in 2025, marking the lowest rate since the onset of the COVID-19 pandemic. According to the report, the conflict in the Middle East and disruptions to the Strait of Hormuz have driven Brent crude oil prices to an average of $94 per barrel in 2026, a 36 percent increase from 2025 levels. Global inflation is expected to rise to 4.0 percent this year, climbing from 3.3 percent in 2025, with significant knock-on effects on fertilizer and food prices.
The World Bank has signaled readiness to provide up to $100 billion over 15 months for affected countries, with $50–60 billion immediately available through existing instruments. Over 30 countries are actively working with the institution to enhance crisis response readiness. The report warns that in a more severe downside scenario involving prolonged energy supply disruptions and financial stress, global growth could fall to just 1.3 percent in 2026.
Growth in developing economies is expected to drop to a post-pandemic low of 3.6 percent in 2026, down from 4.4 percent in 2025. Sub-Saharan Africa's growth is projected at 4.0 percent, while the Middle East and North Africa region faces the sharpest slowdown to 1.6 percent this year. South Asia remains the fastest-growing region at 6.3 percent, though this represents a notable deceleration from 7.0 percent in 2025.
In a separate analysis published in the IMF's Regional Economic Outlook for Sub-Saharan Africa, the Fund reports that bilateral aid to the region fell by approximately 26 percent in 2025, with multilateral support also under pressure. The IMF notes that Sub-Saharan Africa had the highest aid dependency globally in 2024, with aid accounting for an average of 3 percent of GDP at the regional level and reaching as high as 6 percent of GDP or more in low-income and fragile states. The cuts are described as unusually broad and simultaneous across countries, driven by donor decisions rather than conditions in recipient economies, and come at a time when multilateral institutions and NGOs are themselves facing funding constraints.
The IMF observed that governments in affected countries face difficult trade-offs: replacing lost aid can protect services and growth at the cost of wider deficits, while not replacing it risks lasting damage to human capital and development. The Fund's administered surveys covering 28 African countries suggest four broad policy responses to the aid reduction.
Meanwhile, the IMF Executive Board recently completed program reviews for several countries. In Mauritania, the Board approved 42-month arrangements under the Extended Credit Facility and Extended Fund Facility totaling SDR 70.82 million (approximately $95.8 million), alongside the completion of the Resilience and Sustainability Facility program. In Côte d'Ivoire, the Board completed the final reviews of a $3.5 billion EFF/ECF arrangement, noting that the country's economy remains resilient with real GDP growth expected at 6 percent in 2026, moderating from 6.5 percent in 2025 amid heightened global uncertainty. Inflation in Côte d'Ivoire, which declined to near zero in 2025, is projected to average 3.3 percent in 2026.
The World Bank also released an update on its Climate Change Action Plan, confirming the retirement of the 45 percent climate co-benefits target in favor of a shift toward outcome-based measurement, tracking net greenhouse gas emissions and beneficiaries with enhanced resilience to climate risks.
Sources: [imf.org/worldbank.org]
