World Bank Cuts Global Growth Forecast and Lowers Brazil Outlook

Overview

• The World Bank on Thursday revised its 2026 forecast for global growth to 2.5% and said growth could slump to 1.3% if energy disruptions worsen and trigger financial stress.
• The bank reduced Brazil’s growth forecast to 1.9% for 2026 and to 2.0% for 2027 while projecting a gradual pickup to about 2.1% in 2027–2028 as disinflation allows monetary easing.
• The report assumes an average Brent price of about US$94 per barrel for 2026 and warns that higher oil and fertilizer costs have pushed global inflation toward 4% with sharper rises possible in worse scenarios.
• Rising public debt has limited governments’ ability to respond, with aggregate public debt in developing economies rising from under 40% of GDP in 2010 to over 70% now, prompting the bank to call for fiscal rules, sovereign stabilisation funds and extra financing.
• Higher energy and food costs will squeeze households and could force tighter interest rates in many countries, so the bank urges productivity reforms, better revenue mobilization and targeted support to protect vulnerable people.