World Bank | Global Economic Prospects – January 2026: A global slowdown in 2026… What does it mean for Egypt?

(1) General introduction

The Global Economic Prospects – January 2026 edition comes at a time of elevated trade tensions and policy uncertainty—alongside indications of relatively resilient global growth compared to what had been expected, but with a clear warning about weak longer-term economic dynamism. The World Bank indicates that global growth is expected to ease to 2.6% in 2026 before rising to 2.7% in 2027, and that the 2020s could become the weakest decade since the 1960s if current trends persist.

For policy makers in Egypt, this report matters because it links trade, financing, and investment confidence to the ability of emerging economies to create jobs and raise living standards in a context of widening divergence: the World Bank notes that about one in four developing economies remained poorer (in terms of per-capita income) than in 2019. The edition also includes a special-focus chapter on fiscal rules as a tool to restore fiscal credibility amid rising debt—a theme directly relevant to fiscal sustainability agendas and risk management in emerging economies.

(2) Data Card

Brief paragraph:
This edition is a global analytical/forecast report (non-ranked) issued by the World Bank Group. It presents forecasts for growth, inflation, trade, and associated risks, with a particular emphasis on emerging market and developing economies, and includes a statistical appendix and “Data and Forecast Conventions” methodology.

Structured list:

• Official name (EN): Global Economic Prospects – January 2026
• Proposed name (AR–ENCC): Global Economic Prospects – January 2026
• Issuing organization: World Bank Group / World Bank
• Latest edition (Label): January 2026
• Publication date: 2026-01-13 (as per the official press release)
• Data cutoff date (Cutoff): 2025-12-16
• Frequency: Semi-annual (January/June)
• Type: Analytical report / Forecasts — no country ranking
• Status: Active ✅
• Coverage: Global with regional breakdowns and forecasts for selected economies; with the note that the region was reclassified to MNA (Middle East, North Africa, Afghanistan and Pakistan) starting 2025-07-01

Small table:

(3) Methodology and structure (brief)

Forecast methodology and comparability limits

• The report explains that forecasts are updated frequently as information and global conditions evolve, meaning comparisons with previous editions should be read while accounting for data revisions and assumption updates.
• The data cutoff date used in this edition is 16 December 2025 (important when interpreting how “current” the numeric signals are).
• Global growth may be shown using purchasing power parity (PPP) weights in some tables/indicators; the report clarifies that PPP weights give emerging economies a larger weight than market exchange rates.
• For Egypt, some regional tables indicate that the fiscal year runs from 1 July to 30 June (affecting comparability with economies measured on a calendar-year basis).
• Important regional note: the region’s name/scope changed to MNA (adding Afghanistan and Pakistan) starting 1 July 2025, which may limit strict “like-for-like” comparability with some aggregates from June 2025.

Main structural blocks in the release (a practical alternative to “pillars” used in ranked indices)

1. Global economic outlook: recent developments, forecasts, and risks.
2. Regional outlooks: summaries and forecasts for each region (including MNA).
3. Special Focus: an in-depth analysis of how fiscal rules are used in developing economies and how they relate to stability and growth.
4. Statistical appendix + Data and Forecast Conventions.

(4) Global and regional trends

(A) Global snapshot

• The World Bank expects global growth to ease to 2.6% in 2026 and then rise to 2.7% in 2027, noting that the trade boost in 2025 (stemming from “front-loading” of policy decisions/changes and supply-chain adaptation) is likely to fade in 2026 as trade and domestic demand slow.
• Global inflation is expected to decline to 2.6% in 2026, supported by softer labor markets and lower energy prices.
• On living standards: the report notes a widening gap in per-capita income between advanced and developing economies, with about 25% of developing economies remaining below their 2019 per-capita income level through end-2025.

(B) Regionally: Middle East, North Africa, Afghanistan and Pakistan (MNA)

• Regional growth is estimated at 3.1% in 2025 and is expected to improve to 3.6% in 2026 and 3.9% in 2027, which the report attributes mainly to improved activity among oil exporters.
• Example of higher performance within the region (as per available forecasts): Djibouti appears in the regional forecast table with growth rates higher than the regional average over the forecast horizon.
• Examples near Egypt’s range: Algeria and Bahrain appear in growth ranges relatively close to Egypt’s within the regional forecast table (with structural differences between oil and non-oil economies).
• Key methodological follow-up note: adding Afghanistan and Pakistan to the region starting 2025-07-01 changes the composition of regional aggregates compared with some prior editions.

Linking takeaway: the overall signal is “stable but weak” global growth under high trade/policy fog—making regulatory quality, cost of finance, and fiscal space decisive levers for accelerating emerging-economy growth, including Egypt.

(5) Egypt (Facts)

Method note: This edition is not a ranked index; therefore “Egypt’s performance” here is read mainly through the growth forecasts shown in the regional tables, not through an international ranking.

Egypt’s numeric forecasts (real GDP growth, %)

• 2022/23: 3.8
• 2023/24: 2.4
• 2024/25e: 4.4
• 2025/26f: 4.3
• 2026/27f: 4.8

Brief time-path reading

The path shows a clear slowdown followed by a recovery to above-4% territory over the forecast horizon, suggesting an expected improvement in growth momentum relative to 2023/24, while stressing that the numbers should be read in the context of the report’s assumptions and its periodic forecast updates.

“Strengths/weaknesses” as can be inferred from the report’s nature (not from unavailable Egypt-specific structural “pillars” in this edition)

Key investable strengths:

1. An expected recovery path for growth over the forecast horizon (improvement after a slowdown).
2. The possibility to benefit from the report’s mention of improving/loosening global financial conditions as a global tailwind.
3. A “regional window” of improving average MNA growth—despite internal heterogeneity—raising the importance of maximizing cross-border trade and investment gains.

Key vulnerabilities/sensitivities:

1. High sensitivity to the trade tensions and policy uncertainty environment that the report expects to weigh on trade and demand in 2026.
2. Fiscal-space pressure on emerging economies amid elevated global indebtedness—raising the policy trade-off cost.
3. Risks of widening living-standards gaps if private-sector productivity/investment weakens, a point the report emphasizes as central to jobs challenges in developing economies.

(6) Summary tables/lists

Table 1 (Mandatory): “Main axis ↔ Sub-item ↔ Egypt status ↔ Short policy note”

Table 2 (Optional): Brief comparison (global/region/Egypt)

Note: Egypt numbers are taken from the regional forecast table; the fiscal-year basis is indicated in the report annexes.

(7) Performance gap analysis and improvement priorities (Top 5)

1. Trade-predictability gap: continued tensions weigh on trade in 2026; strengthening predictability in trade policy and logistics reduces shock impact on exports and production.
2. Private investment gap: weak “regulatory credibility” raises the cost of capital; reforms to rule predictability and market competitiveness are necessary to accelerate growth and create jobs.
3. Fiscal-space gap: elevated indebtedness constrains shock response; adopting a medium-term fiscal framework and improved fiscal rules supports sustainability.
4. Private finance mobilization gap: high investment needs versus limited fiscal capacity; improving PPP tools and infrastructure finance reduces pressure on the budget.
5. Productivity/skills gap: youth jobs challenges intensify with weak per-capita income; investing in technology, education, and skills lifts productivity and narrows gaps.

(8) Reform roadmap (6–24 months) — policy recommendations

• Strengthen “policy certainty” and transparency of investment rules (6–12 months).
  Realized benefit: reduces risk premia and improves predictability for investors, helping stimulate private investment and expand job creation.
  Report basis/priority: the report links weaker growth and slowdown risks to rising uncertainty and pushes for reforms that remove “structural bottlenecks” and support private investment.
• Accelerate trade facilitation and logistics services (6–12 months).
  Realized benefit: improves export competitiveness and supply-chain resilience and reduces trade time/cost, especially in a year where the report expects global trade to slow in 2026.
  Report basis/priority: the report highlights the impact of trade tensions/restrictions and the fading of the 2025 trade boost in 2026, emphasizing the importance of improving the trade environment to mitigate shocks and support growth.
• A practical package to ease private-sector financing constraints and mobilize capital (6–18 months).
  Realized benefit: converts the expected recovery into real investment by improving access to finance and lowering the cost of capital, accelerating productivity and jobs.
  Report basis/priority: the report places financing constraints among pressure points for developing economies and calls for steps that ease financing and stimulate private investment.
• A medium-term public finance framework with fiscal rules designed for flexibility and transparency (12–24 months).
  Realized benefit: restores fiscal credibility, improves shock-absorption capacity, and reduces debt refinancing risks—supporting the investment environment.
  Report basis/priority: the “Special Focus” in the report makes the case for fiscal rules as a tool to rebuild fiscal space amid rising debt, while warning that success depends on design, implementation, and credibility.
• Remove execution bottlenecks in the business environment through a short, clear national bottlenecks list (6–18 months).
  Realized benefit: delivers fast, tangible effects on compliance costs and the speed of starting/operating projects (especially labor-intensive ones), supporting Egypt’s expected growth path.
  Report basis/priority: the report focuses on removing structural bottlenecks as a condition for accelerating private investment and job creation in developing economies.
• Integrate climate-risk management into investment and infrastructure decisions (12–24 months).
  Realized benefit: reduces shock losses, improves asset sustainability, and increases long-term investment attractiveness (especially in infrastructure and services).
  Report basis/priority: the report includes climate risks among the risks affecting growth and points to the need to embed them into the policy package supporting investment and resilience.
• An “ENCC GEP dashboard” to track forecast updates and assumptions (6–12 months).
  Realized benefit: faster and more disciplined decisions because the report explains that forecasts are updated frequently and may change with new developments; the dashboard prevents misreading differences across editions.
  Report basis/priority: the report’s warning on frequent forecast updates and comparability limits raises the priority of building an institutional tracking mechanism.

Direction reference: the official release recommends liberalizing investment and trade, improving the business environment, mobilizing private capital, and strengthening fiscal sustainability through tools such as fiscal rules—while stressing that “rules alone are not enough” without credibility and enforcement.

(9) Focused conclusion

The Global Economic Prospects – January 2026 edition reflects a dual picture: relatively resilient performance amid trade tensions and uncertainty, but with a warning about a historically weak-growth decade and widening living-standards gaps in developing economies. For Egypt, regional forecasts suggest a recovery path for growth over the forecast horizon; yet turning that path into durable gains in income and jobs requires a reform package centered on policy certainty, trade facilitation, private finance mobilization, and restoring fiscal discipline through practical tools including well-designed fiscal rules.

Official links and references

• Press Release (2026-01-13): https://www.worldbank.org/en/news/press-release/2026/01/13/global-economic-prospects-january-2026-press-release
• Landing (GEP): https://www.worldbank.org/gep
• PDF (GEP Jan 2026): https://thedocs.worldbank.org/en/doc/7ce50b5aa95bef66048680bba9926ec8-0050012026/original/GEP-Jan-2026.pdf

Additional links for publishing (Further Reading)

• Commodities indicators page (method reference for some tables): https://www.worldbank.org/commodities
• Global Economic Prospects archive/editions (via GEP page): https://www.worldbank.org/gep

Notes and data limitations

• This release is a non-ranked analytical/forecast report; “Egypt status” is read through regional tables and numeric forecasts rather than an international ranking.
• Cutoff = 2025-12-16 is a governing element when interpreting the freshness of numbers and assumptions.
• Differences in measurement year (Egypt fiscal year 1 July–30 June) affect comparisons with economies measured on a calendar-year basis.
• The change in regional scope/label to MNA effective 2025-07-01 may limit strict comparability with aggregates in some prior editions.