Economics & Development

Hurricane Melissa significantly disrupted Jamaica’s economy, reversing its progress in growth, employment, and poverty reduction. Strong pre-crisis macroeconomic management, characterized by disciplined fiscal policy, credible monetary frameworks, and multi-layered disaster risk financing, helped cushion the immediate impact. Reconstruction and a gradual recovery in tourism and agriculture will support an economic rebound, but a high level of uncertainty remains.

Ecuador’s structural challenges include low growth, low quality employment, and fiscal accounts heavily dependent on oil revenues. Near-term priorities center on preserving fiscal sustainability, addressing power shortages, and improving security. Growth rebounded in 2025, estimated at 3.7 percent, with a modest 2026–2028 growth outlook of around 2.5 percent, supported by private spending as fiscal risks diminish, with poverty expected to decline gradually.

Growth is expected to soften to 4.3 percent in FY26 from 4.4 percent in FY25. Inflation remains in double digits, thus constraining household purchasing power. The conflict in the Middle East will weaken the external position and pose risks to the growth and poverty-reduction outlooks. Job-rich growth and improved socioeconomic outcomes require strengthening fiscal institutions and advancing the “business ready” agenda and human capital development.

Growth slowed to 2 percent in 2025 amid internal and external pressures. It is projected to recover to 2.7 percent in 2026, as consumption and investment rebound gradually although external uncertainty persists, including due to the conflict in the Middle East. The incidence of poverty remained broadly flat at 7.8 percent in 2025 and is projected to continue falling, albeit at slower rate, as the remaining poor are often characterized by chronic unemployment.

Russia's economy slowed sharply in 2025, with GDP growth falling to 1 percent from 4.9 percent in 2024, as fiscal stimulus faded and tight monetary conditions weighed on consumption and investment. Inflation moderated in line with cooling demand. The fiscal deficit widened and external surplus narrowed amid falling oil revenues. Growth is projected to remain anemic in the medium term, hovering around 0.7 percent.

Romania’s growth slowed to 0.7 percent in 2025, reflecting structural weaknesses in productivity and competitiveness, while fiscal consolidation and high inflation eroded welfare, notably for poorer households. The Middle East conflict adds inflationary pressures and clouds growth prospects, raising poverty risks. Amid headwinds, the Government's recovery package aims to support a gradual rebound, contingent on swift implementation and EU funds absorption.

Croatia’s growth in 2025 slowed to a still solid 3.2 percent. It was driven by strong private consumption supported by rising real disposable income, expansionary fiscal policy, and robust European Union (EU) funds inflow. Due to the conflict in the Middle East, growth is expected to moderate, while the anticipated downward trend in inflation will be temporarily reversed in 2026. Fiscal deficit is expected to remain around 3 percent of GDP.

This paper analyzes the effect of societal aging on income inequality in Malaysia, to date and in the coming decades. The study starts from the hypothesis that, all things equal, aging exerts upward pressure on inequality (Deaton and Paxson (1994, 1995)). Drawing on nationally representative household survey data over the past two decades, the study finds evidence in support of this hypothesis in Malaysia. This picture becomes even sharper when projecting inequality levels for the years when Malaysia is forecast to reach aged (2045) and super-aged (2056) status. Estimates show that between 2022 and 2056, overall inequality of individual incomes could rise by as much as 13 percent due to aging. The analysis then demonstrates that expansion of a social pension system would attenuate this projected rise in inequality. The paper also undertakes counterfactual exercises simulating the expansion of an old age social pension with various design variants. The variants considered would expand existing social transfers for older people. Given the public revenue and spending patterns in Malaysia, some of these design options are potentially manageable from a fiscal perspective. The analysis suggests that, relative to the observed situation in 2022, wider coverage of social pensions could have resulted in lower inequality in household per capita income among older individuals (by 12–26 percent), thereby lowering overall inequality (by 4-9 percent). This inequality-reducing effect of social pensions becomes even more marked when projecting estimates of inequality for 2045 and 2056. Moreover, the findings show that expanded pensions would have resulted in a lower headcount poverty rate in 2022 by 1.3–4.2 percentage points among the 60+ population, and by 0.5–1.9 points among the overall population.

This statement, delivered by Jan Jambon, Deputy Prime Minister and Minister of Finance and Pensions, and Maxime Prévot, Deputy Prime Minister and Minister of Foreign Affairs, European Affairs and Development Cooperation of Belgium, on behalf of Austria, Belgium, Czech Republic, Hungary, Kosovo, Luxembourg, Slovak Republic, Slovenia, and Türkiye, to the 113th Meeting of the Development Committee on April 16, 2026, underscores the urgency of decisive multilateral action amid escalating conflict, geopolitical fragmentation, and economic uncertainty. It reaffirms the central role of the World Bank Group (WBG) in supporting peace, recovery, and long‑term development, including sustained engagement in fragile and conflict‑affected settings such as Ukraine, Gaza and the West Bank, and other crisis‑affected regions, while upholding international and humanitarian law. The statement welcomes progress under the WBG’s Job Strategy and highlights the importance of creating business‑enabling environments, good governance, gender equality, and fair taxation to generate more and better‑paid jobs. It calls for sustained reform momentum to strengthen delivery, effectiveness, and accountability, particularly in FCV contexts, along with deeper partnerships across multilateral institutions, the private sector, academia, and civil society. The constituency supports scaling up private sector mobilization through de‑risking tools, guarantees, and IFC’s platform approach, while emphasizing climate action, nature and biodiversity, and resilient energy systems, including nuclear energy where appropriate. It also welcomes IDA21’s record replenishment and ongoing governance reforms to enhance the voice of poorer countries, concluding with strong appreciation for the dedication of WBG staff and continued commitment to a more effective, inclusive, and impact‑driven World Bank Group.

This statement, delivered by Satsuki Katayama, Minister of Finance of Japan, to the 113th Meeting of the Development Committee on April 16, 2026, outlines Japan’s assessment of the evolving global development landscape amid geopolitical tensions, heightened economic uncertainty, and persistent long‑term development challenges. It underscores Japan’s expectation that the World Bank Group (WBG) play a central role in addressing poverty, health challenges, debt vulnerabilities, natural disasters, and global instability through efficient, effective, and inclusive development support. Emphasizing limited development assistance resources, the statement highlights the importance of maximizing impact through the One WBG approach, strengthened collaboration across sovereign and non‑sovereign operations, and enhanced incorporation of developing country voices, including through agreed Voice reforms. Japan identifies priority areas where it expects strong WBG leadership, including strengthening critical mineral supply chains, advancing universal health coverage and pandemic preparedness, mainstreaming disaster risk management, promoting quality infrastructure, expanding energy access and digitalization, and addressing debt transparency, restructuring, and domestic resource mobilization. Special attention is given to the vulnerabilities of Pacific Island countries and the need for tailored support, as well as to continued assistance for Ukraine’s financial stability and reconstruction. The statement concludes by reaffirming Japan’s strong commitment to sustained cooperation with the WBG and the IMF, including through financial contributions, policy engagement, and human resource support, to ensure both institutions continue to lead effectively in promoting global stability, sustainable development, and shared prosperity.

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 Latin America and the Caribbean 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.