The World Bank has increased its projection for Nigeria’s economic growth rate for 2026 to 4.4 percent from the 3.7 percent forecasted in June 2025.
World Bank announced the increase in its 2026 ‘Global
Economic Prospects’ report on Tuesday.
The global financial institution also upgraded Nigeria’s
economic growth rate for 2027 to 4.4 percent from 3.8 percent.
In addition, Bretton Woods institution estimated that
Nigeria’s economy grew by 4.2 percent in 2025, compared to the 3.6 percent
forecasted in June last year.
Also, the World Bank increased its 2026 global economic
growth rate projection from 2.4 percent to 2.6 percent.
In the report, the financial institution also estimated 2.7
percent economic growth rate for 2025 period compared to the 2.3 percent
forecasted in June last year.
According to the report, the 2027 global economic growth
rate is projected at 2.7 percent, compared to the 2.6 percent forecasted in
June 2025.
World Bank said the global economy is proving more resilient
than anticipated despite persistent trade tensions and policy uncertainty.
However, the bank noted that while global growth remains
stable, it is concentrated in advanced economies and is unlikely to reduce
extreme poverty, with the 2020s on track to be the weakest decade since the
1960s.
“The resilience reflects better-than-expected growth —
especially in the United States, which accounts for about two-thirds of the
upward revision to the forecast in 2026,” the World Bank said.
The institution said global growth will slow in 2026 as
trade-related boosts fade, but easing financial conditions and fiscal expansion
are expected to cushion the impact.
It added that inflation is projected to edge down to 2.6
percent in 2026, with growth picking up in 2027 as trade and policy uncertainty
ease.
Indermit Gill, the World Bank Group’s chief economist, said
with each passing year, the global economy has become less capable of
generating growth while appearing more resilient to policy uncertainty.
“But economic dynamism and resilience cannot diverge for
long without fracturing public finance and credit markets,” Gill said.
“Over the coming years, the world economy is set to grow
slower than it did in the troubled 1990s — while carrying record levels of
public and private debt.
“To avert stagnation and joblessness, governments in
emerging and advanced economies must aggressively liberalise private investment
and trade, rein in public consumption, and invest in new technologies and
education.”
GROWTH IN SUB-SAHARAN AFRICA PROJECTED TO REACH 4.3% BY 2026
The World Bank said sub-Saharan Africa’s growth is expected
to rise to 4.3 percent in 2026 and 4.5 percent in 2027.
In 2026, the institution said growth in developing economies
is projected to slow to 4 percent from 4.2 percent in 2025 before edging up to
4.1 percent in 2027 as trade tensions ease, commodity prices stabilise,
financial conditions improve, and investment flows strengthen.
The bank noted that growth is projected to be higher in
low-income countries, averaging 5.6 percent over 2026–2027, supported by
stronger domestic demand, recovering exports, and moderating inflation.
The World Bank said developing economies will continue to
lag behind advanced economies, with per capita income growth projected at 3
percent in 2026, widening the income gap.
“At this pace, per capita income in developing economies is
expected to be only 12% of the level in advanced economies,” the institution
said.
Ayhan Kose, the World Bank Group’s director of the Prospects
Group, said with public debt in emerging and developing economies at its
highest level in more than half a century, restoring fiscal credibility has
become urgent.
“Well-designed fiscal rules can help governments stabilise
debt, rebuild policy buffers, and respond more effectively to shocks,” Kose
said.
“But rules alone are not enough: credibility, enforcement,
and political commitment ultimately determine whether fiscal rules deliver
stability and growth.”
Kose said more than half of developing economies have
adopted fiscal rules, which can improve budget balances by 1.4 percent of GDP
after five years and increase the likelihood of sustained improvement.
The director added that the use of fiscal rules also rises
by 9 percentage points the likelihood of a multi-year improvement in budget
balances.
However, Kose noted that both the short- and long-term
benefits of fiscal rules depend on institutional strength, economic context,
and the design of the rules.
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