The global economy is ‘settling into a better equilibrium’, says this World Bank expert

The global economy is finding stability after a turbulent period, says Indermit Gill, Chief Economist at the World Bank. Inflation, which surged in recent years, is finally easing. This shift allows advanced economies to shift focus from inflation control back to growth.

Many chief economists are optimistic, with nearly 90% in the United States expecting moderate or strong growth in 2025, and over 70% in South Asia predicting strong or very strong economic expansion.

Despite this optimism, the pace of growth is slower than in past decades. Growth rates today are lower than in the 2000s and even the 2010s. This slowdown is compounded by conflicts in regions like the Middle East, Ukraine, and Sudan, which impact markets and resources.

Additionally, advanced economies face “secular stagnation”—a slowdown driven by aging populations and decreasing productivity growth.

Middle-income nations risk falling into a “middle-income trap,” where growth stalls at income levels between $1,500 and $15,000 per capita. Low-income countries are even more vulnerable, with many experiencing a “lost decade” of stagnant or shrinking per capita incomes.

High-interest debt has added to their challenges, redirecting funds from essential services like education and infrastructure to debt servicing.

Gill remains hopeful, pointing to the resilience of the U.S. private sector and the strong performance of emerging economies like India and Indonesia.

Even among poorer nations, examples like Rwanda show that progress is possible despite difficult conditions. Many economists agree that prioritizing sustainability, economic equality, and social cohesion is essential—even if it means a slower growth rate.