World Bank Warns The 2020s Could Become A 'Lost Decade' For Developing Economies. Here's Why

Published 13 June 2026 · india

World Bank Warns The 2020s Could Become A 'Lost Decade' For Developing Economies. Here's Why Published By, Last Updated: June 13, 2026, 17:36 IST World

World Bank Warns The 2020s Could Become A 'Lost Decade' For Developing Economies. Here's Why Published By, Last Updated: June 13, 2026, 17:36 IST World Bank warns many developing economies face a lost decade as weak growth, high debt and low investment stall income convergence. World Bank warns many developing economies face a lost decade as weak growth, high debt and low investment stall income convergence. (Image: AP) The World Bank has warned that many developing economies risk enduring a “lost decade" as weak growth, rising debt, slowing investment and repeated global shocks continue to hinder efforts to catch up with wealthier nations. In its latest Global Economic Prospects report released in June 2026, the World Bank said progress made before the COVID-19 pandemic has been severely undermined, leaving dozens of countries struggling to narrow income gaps with advanced economies. “The 2020s will prove to be what their ominous opening foreshadowed: a lost decade—not just for a couple of outliers, but for dozens of developing economies," World Bank Chief Economist Indermit Gill said. Pandemic Recovery Remains Uneven According to the report, nearly half of all developing economies have failed to make meaningful progress in closing the income gap with richer countries since 2019.

The World Bank estimates that by the end of 2026, one-quarter of developing economies, one-third of low-income countries and half of fragile or conflict-affected states will still be poorer than they were before the pandemic. The report said the setbacks reflect the cumulative impact of the COVID-19 crisis, geopolitical tensions, trade disruptions, inflationary pressures and slower global growth. Debt and Investment Concerns Grow The World Bank highlighted mounting financial pressures across emerging and developing economies. Government debt levels have surged to record highs, while private investment growth has slowed sharply. According to the report, private investment growth during the 2020s has fallen to less than half the pace recorded during the previous decade. The slowdown has raised concerns about long-term economic development, productivity growth and job creation. Income Gap May Take Years to Recover The report projects that per-capita income levels in emerging market and developing economies, excluding China and India, will not return to their pre-pandemic convergence path with advanced economies until after 2028. This means many countries could experience nearly a decade of stalled progress in narrowing income disparities with wealthier nations.