The world economy is still growing, but the recovery’s center of gravity has shifted. The World Bank says the 2020s are on track to become the weakest growth decade since the 1960s, even after a post-pandemic bounce that looks solid on paper. The catch is who is benefiting. While most rich countries are expected to recover to their pre-COVID income levels, many developing economies are not—and that gap is getting harder to close. For Mexico, the ripple effects are already familiar.
A decade that keeps losing momentum
For a world that has lived through a pandemic, inflation spikes, wars, and repeated trade disruptions, the headline from the World Bank’s latest global outlook can sound almost reassuring: the economy is still expanding. The Bank expects global growth to remain relatively steady through 2027, even as last year’s unusual supports fade and the recovery becomes more dependent on fundamentals.
But “steady” is doing a lot of work in that sentence. The World Bank’s deeper warning is about the decade, not the next quarter. Even if the forecasts hold and growth avoids a sharp downturn, the average pace of the 2020s is still tracking toward the weakest global growth decade since the 1960s. That is a historically low bar for a world with larger populations, higher expectations, and more pressure on public finances than in earlier eras.
The rebound that doesn’t reach everyone
One of the strangest features of the post-pandemic period is that the global economy has looked resilient in aggregate while feeling fragile in daily life. Incomes and output in many high-income countries have recovered faster than expected, and the world as a whole is projected to be meaningfully richer per person than it was on the eve of COVID by 2025.
The problem is that this “global” recovery is not evenly shared. The World Bank’s projections suggest that by the end of 2025, roughly one in four developing economies will still have lower per capita income than in 2019. For low-income countries, the share still worse off is even larger. This is the kind of divergence that leaves the economic conversation fractured: one set of countries debates how to manage a new wave of investment and technological change, while another struggles to rebuild basic momentum.
A widening gap, measured in everyday math
The World Bank puts the gap into a comparison that is hard to ignore. By the end of this year, developing economies are expected to average around $6,500 in GDP per person—about 12% of the level in advanced economies. For low-income countries, the figure is projected to be under $700 per person, roughly 1% of the level in high-income countries. These are not just statistics about output; they are proxies for what households can afford, what governments can fund, and how quickly countries can expand opportunity.
Part of the story is that developing economies are growing, but not fast enough to close the distance. The Bank expects growth in developing economies to slow to about 4% in 2026 from 2025, with only a slight pickup in 2027. Low-income countries are projected to grow faster on average over 2026–27, yet even that is not expected to narrow the income gap with richer economies. The report projects per-capita income growth in developing economies of around 3% in 2026—about a percentage point below the average pace those countries managed in the two decades before the pandemic.
Then there is the demographic pressure behind the forecasts. Over the next decade, about 1.2 billion young people in developing economies will reach working age. In a high-growth world, that could be a dividend. In a low-dynamism decade, it becomes a jobs challenge of historic scale. When growth is modest, the math of job creation gets unforgiving: even “okay” growth can still fail to produce enough decent work, quickly enough, to keep living standards moving.
Why this matters in Mexico, even if you live far from Wall Street
Mexico is not among the world’s poorest countries, and it has real strengths in a reshaped global economy—from industrial depth to geography, and from export capacity to the potential of fresh investment. Still, Mexico lives inside the global weather system. When the world’s growth engine runs at a lower gear, it tends to show up in softer demand for exports, more cautious investment decisions, and less policy room to respond when shocks hit.
For expats living in Mexico, the consequences can feel indirect at first, then suddenly personal. A slow-growth global decade can influence currency swings, hiring patterns, and the pace of new construction or business formation in the places you live. It can also sharpen a familiar tension: people paid in stronger currencies may feel buffered, while local wage growth struggles to keep up with prices. When job creation is harder, and incomes are squeezed, the same forces that make Mexico attractive to newcomers can also intensify pressures around rents, services, and the sense of who is benefiting from “growth.”
The World Bank’s regional outlook anticipates only moderate growth for Latin America and the Caribbean over 2026 and 2027. Moderate growth is nothing, but in the context of a decade, the Bank’s warning could be historically weak; it can still translate into a lived reality of slow progress and uneven gains—especially for younger workers and lower-income households.
The real warning behind the forecast
The World Bank’s message is not that a global recession is inevitable. It is that the world is sliding into a pattern where resilience is replacing dynamism—where economies can absorb shocks without breaking, but cannot generate enough sustained growth to reduce extreme poverty and expand opportunity at scale. The report points to heavy debt burdens, fading one-off boosts from supply-chain adjustments, and persistent policy uncertainty as headwinds that will not fix themselves.
For readers in Mexico, the takeaway is less about memorizing a growth number and more about recognizing the shape of the moment. In a slow-growth world, good jobs become more valuable, policy mistakes more expensive, and inequality harder to ignore. It also means that the choices made now—about investment, productivity, skills, and fiscal credibility—matter more than usual, because there is less growth “extra” to paper over problems.
