The post pandemic economic recovery, while remarkably strong in historical terms, has been profoundly uneven, creating a widening chasm between the fortunes of advanced economies and a significant portion of the developing world, the World Bank warned in its January 2026 report.
The report’s analysis reveals that while global GDP per capita is 10 percent higher than on the eve of the pandemic, the strongest recovery from a global recession in over 60 years, this figure is skewed by the performance of wealthier nations. Nearly all advanced economies are now richer than they were in 2019, but a quarter of emerging market and developing economies (EMDEs) are poorer. The situation is even more dire for low income countries and those grappling with fragility and conflict, where over a third have seen their per capita incomes decline.
“The strength of the global recovery since 2020 masks a striking divergence,” the report states. By the end of 2025, developing economies will have an average GDP per person of around $6,500, a mere 12 percent of the average in advanced economies. For low income countries, the figure is less than $700.
This divergence is starkly illustrated by comparing the two most recent global recessions. Five years after the 2009 financial crisis, the per capita income gap between low-income countries and advanced economies had narrowed by about 3 percent. In stark contrast, by 2025, that gap has widened by 10 percent relative to 2019.
The World Bank attributes this disappointing outcome to a confluence of factors, including more limited fiscal space in developing nations at the onset of the pandemic. Having accumulated significant debt in the preceding decade, many EMDEs were unable to deploy the same scale of fiscal stimulus as advanced economies, blunting their recovery. This stands in contrast to their response to the 2009 crisis, when they had built up substantial policy buffers.
“This depressing statistic hides an even more disconcerting detail,” according to Chief Economist Indermit Gill. “These trends cannot be explained by misfortune alone. In far too many developing countries, they reflect avoidable policy mistakes.”
The weak recovery has dire implications for poverty reduction and job creation. Poverty rates, which declined after 2009, have risen in the most vulnerable EMDEs since 2020. The challenge is compounded by demographics. Over the next decade, 1.2 billion young people will reach working age in EMDEs, demanding an urgent focus on generating productive employment to prevent further social and economic strain.