World Bank has noted in a latest update that the year 2025 saw wild swings in the global economy. Initial optimism shifted to widespread pessimism as countries confronted slowing global growth, geopolitical tensions, policy uncertainties, rising trade frictions, and persistent debt. 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. World Bank highlighted that many countries grappled with a cascade of shocks and economic turbulence, from ongoing conflicts and economic uncertainty to catastrophic weather that tested communities. Yet in the face of these challenges, nations proved far more resilient and adaptive in 2025 than predicted.

However, despite these major challenges, the global economy performed better than many had expected, particularly in developing countries. Global growth surpassed forecasts even amid tariffs and trade tensions, with some relief as bond markets reopened, and interest rates began to ease. Decreasing trade-policy uncertainty and stable energy markets also contributed. Forecasters now anticipate growth of about 2.7 percent for this year—generally in line with expectations at the start of 2025. This resilience was fueled by rapid adaptation, including the shifting of supply chains, fast adoption of digital technologies like artificial intelligence (AI), and diversified markets.

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