Policy Papers

Global growth is projected to remain broadly steady this year and next, but the outlook is subject to elevated uncertainty as significant policy changes are underway in major economies and ongoing wars and conflicts continue to impose a heavy humanitarian and economic toll. Medium-term growth prospects remain tepid, largely held back by weak productivity, and public debt is high in many countries. The low-growth, high-debt outlook could stifle job creation, and leave countries exposed to future shocks and with limited room to finance essential investment. For EMDEs, it would also set back prospects for their convergence to higher income levels and, for vulnerable countries, exacerbate challenges from high debt service payments and elevated development needs. Transformative changes—including digitalization/AI, demographic shifts, and climate transitions—are reshaping the world economy, creating both challenges and opportunities, including for jobs, productivity, and innovation.