Economics & Development

In 2025, GDP growth reached 5.6 percent (2.1 percent per capita). Lower food and transport prices pushed inflation to -2.6 percent, reducing poverty to 40.7 percent (US$3.00, 2021 PPP). Growth is expected to remain robust, supported by non-oil expansion. Higher oil prices from the Middle East conflict could boost exports and fiscal revenues but may also increase transport costs, raising the import bill and fueling inflation.

Growth is projected at 6.1 percent in 2026, supported by infrastructure, extractives, an improving business environment, and macroeconomic stability with low inflation and exchange rate flexibility. External balances are manageable, amid positive terms of trade. Fiscal deficits will narrow as revenue strengthens. Yet, poverty is expected to decline marginally given human development gaps and scarce jobs. Risks include political tensions, fiscal pressures, Middle East conflict, and climate shocks.

Economic growth remained robust in 2025, driven by trade, transport, and construction activities. Inflation remained within its target range, but pressures are amounting following recent tax measures. Significant risks persist, including the potential decline in external financing and climate related shocks. Poverty reduction is expected to be considerable in the short term if recent trends are sustained.

Substantial progress in restoring macroeconomic stability through fiscal consolidation and exchange rate reforms. Growth rebounded to 4.4 percent in 2025 and is projected at 3.6 percent in 2026. Inflation is declining. Poverty has eased, though high informality and inequality constrain inclusive growth. Balancing exchange rate flexibility, reserves accumulation, and disinflation poses risks, amid shallow buffers and heightened international volatility.

Tajikistan’s economy grew 8.4 percent in 2025, fueled by remittances. Growth is projected to ease to 6.5 percent in 2026 due to decreasing remittances and lower non-precious metal exports. The fiscal balance is expected to deteriorate due to substantial capital expenditures, though debt will remain low at 19 percent of GDP. Poverty declined to 14.8 percent and is projected to decline further.

This statement, delivered by Elisabeth Svantesson, Chair of the Development Committee, reflects the views of the majority of members following the Committee’s 113th meeting held on April 16, 2026. It highlights mounting challenges facing the global economy amid repeated shocks from conflicts, heightened uncertainty, constrained policy space, and weakened international cooperation, which disproportionately affect the poorest and most vulnerable. The statement underscores the importance of timely, flexible, and well‑anchored policy responses, supported by credible frameworks and strengthened multilateral cooperation, and reiterates that ending wars and securing lasting peace remain essential for sustainable growth and stability. Members commend the World Bank Group and the International Monetary Fund for the scale, speed, and effectiveness of their crisis responses and for continued collaboration with development partners. The Committee strongly supports the World Bank Group’s renewed focus on job creation through investment in infrastructure and human capital, improvements in the business environment, and mobilization of private capital. Emphasis is placed on reforms that strengthen debt sustainability, domestic resource mobilization, governance, and anticorruption efforts, while promoting gender equality and inclusion. The statement welcomes institutional reforms to enhance efficiency and impact, sectoral initiatives to expand access to energy, food security, health, water, and digital services, and continued support for countries affected by fragility, conflict, and violence. It reaffirms commitment to multilateralism, partnerships, and ambitious delivery under IDA21.

This edition of the Macro Poverty Outlooks periodical contains country-by-country forecasts and overviews for GDP, fiscal, debt and poverty indicators for the developing countries of South Asia region. Macroeconomic indicators such as population, gross domestic product, and gross domestic product per capita, and where available, other indicators such as primary school enrollment, life expectancy at birth, total greenhouse gas emissions and inflation, among others, are included for each country. In addition to the World Bank’s most recent forecasts, key conditions and challenges, recent developments and outlook are briefly described for each country in the region.

How people move through cities has far-reaching consequences for air quality, public health, and the climate. Steering urban passenger transport toward low-emission pathways is one of the most direct levers policy makers can use to make cities cleaner, healthier, and more livable. Yet urban transport remains a major and growing source of greenhouse gas emissions and local air pollution, a trend that is especially pronounced in low- and middle-income countries (LMICs). Tackling this challenge requires effective strategies for cleaner urban mobility, which in turn depend on robust, evidence-based planning tools. Existing tools, however, fall short in several respects: their efficacy is hindered by inconsistent and sparse data (particularly in LMICs), and they lack scalability, rely on opaque methodologies, and require significant technical expertise. Together, these shortcomings limit their value for policy making and hinder cross-city comparison. This report introduces the Passenger Transport Emissions Pathways (PATH) model, a framework developed by the World Bank’s Transport and Logistics Unit to address these gaps. Designed for cities across the globe, with a focus on LMIC contexts, PATH equips policy makers with a scalable, data-driven tool for estimating city-level transport demand, emissions, and air pollutants. Covering nearly 4,000 urban areas in 116 LMICs, the model enables globally comparable analyses while accounting for local characteristics.

The Malaysian economy was resilient in 2025, growing at 5.2 percent, surpassing the official projection of 4.0–4.8 percent. The economy is expected to grow at 4.4 percent in 2026. While Malaysia has successfully reversed pandemic-era setbacks in poverty, the transition toward high-quality, productivity-led growth is challenged by structural labor market imbalances and a narrow fiscal envelope.

Yemen’s economy contracted again in 2025 amid persistent conflict, institutional fragmentation, and blocked oil exports. CBY-Aden interventions have stabilized the exchange rate, but vulnerabilities remain. Humanitarian needs remain severe, with 23.1 million people expected to require assistance in 2026. The new IRG Cabinet's reform commitments in early 2026offer a window of opportunity for economic recovery, but the conflict in the Middle East poses acute downward risks.