Doha: Two economists have highlighted that despite the World Bank's recent semiannual report indicating weak global output growth by 2026, the global economy demonstrates resilience and a capacity to withstand crises.
According to Qatar News Agency, the experts noted that while the World Bank report forecasts global output growth to slow slightly to 2.6 percent this year, compared to 2.7 percent last year, this upward revision from earlier estimates suggests the global economy is better equipped to handle shocks, particularly those related to trade and fiscal policies. They explained that this improvement is more about major economies avoiding recession rather than a widespread recovery.
The report, which examined key indicators and potential challenges affecting global growth, underscored the disparities in impact between advanced and developing economies. It warned that the improvement in global growth is uneven, with advanced economies being the primary contributors, while developing nations face greater hurdles in achieving robust and sustainable growth. This implies that the benefits of global growth will have limited impact on reducing extreme poverty in these countries.
Economists suggest that this disparity in global growth indicates that the gap between advanced and developing economies may remain or widen, making development and poverty alleviation persistent concerns.
Dr. Abdullah Al Khater, an economic expert, commented to QNA on the World Bank report indicators, stating that the global economy has shown improved resilience against recent crises, such as trade disruptions. He noted that while significant impacts were anticipated in global markets, especially oil, prices remained stable, preventing a rise in global inflation rates.
Dr. Al Khater added that this unexpected stability allowed the global economy to adapt to crises and geopolitical fluctuations, leading to a more rational and mature market environment. He explained that traditional growth projections are based on outdated assumptions, with future growth increasingly reliant on technological advancements, which could lead to exceptional growth rates.
He predicted growth in sectors like electric vehicles and artificial intelligence, potentially lowering manufacturing costs and boosting overall global economic growth. He highlighted that the Chinese economy would benefit significantly, while the United States remains competitive. Europe, on the other hand, may struggle to keep pace, although the Middle East's projects could contribute to global growth.
Dr. Al Khater emphasized the importance of technological integration for countries and companies aiming for exceptional growth, as well as the need for policy shifts to facilitate higher global growth rates. He concluded that new technology, including AI and robotics, will become key indicators for forecasting growth.
Dr. Omar Gharaibeh, a Jordanian academic, shared insights on the World Bank report, noting that global growth is projected to drop to 2.6% in 2026, yet upward revisions to previous forecasts indicate improved shock absorption capacity. He highlighted that the United States' stronger-than-expected performance drives much of this optimism, though other regions lag behind.
Dr. Gharaibeh pointed out that while global GDP per capita has recovered rapidly since the pandemic, deep disparities persist. Many developing countries still experience lower per capita income than in 2019, especially in the poorest regions. He stressed the need for a global policy shift towards supporting trade, investment, and technological development to address structural challenges and promote inclusive growth.
Economic reports suggest that although the World Bank outlook offers a cautiously positive view on the global economy's resilience, growth remains insufficient to significantly alleviate extreme poverty, particularly given the stark divide between advanced and emerging economies.