Economics & Development

Real GDP grew 3.8 percent in 2025, driven by consumption fueled by record-high remittances and robust coffee exports. In 2026, growth is projected to slow to 3.4 percent with declining remittances and rising inflation moderating household consumption. Labor income has driven poverty reduction although challenges persist with job quality, fragmented social transfers, and insufficient basic services coverage, hindering further progress.

Growth in 2025 was supported by strong mining activity and lower inflation due to moderation of global prices of food and fuel. Investments to develop the Colluli potash mine and upgrade Eritrea’s power stations are expected to support growth of around 3.5 percent in the near term. Downside risks include production delays at the Colluli mine, volatility in global commodity markets, geopolitical risks, and climate vulnerabilities.

Driven by a modest recovery in agriculture, growth is projected at 2.3 percent in 2026, a contraction in per capita terms. Ongoing fiscal consolidation and debt restructuring are expected to place public debt on a gradual downward path. However, modest growth, high inflation, widespread exchange rate distortions, and limited job creation mean poverty reduction will remain constrained, with only limited gains in household incomes.

Mongolia’s economy grew at 6.9 percent in 2025, driven by a surge in copper production and an agricultural rebound. Weaker coal prices, however, limited fiscal gains. Inflation remained above the central bank’s target, and poverty declined more slowly as higher prices weighed on real incomes. The authorities tightened monetary and fiscal policy. Growth is expected to remain robust in 2026, although external uncertainty and fiscal pressures pose risks.

Tunisia’s economy grew by 2.5 percent in 2025, driven by agricultural recovery and increased manufacturing activity. With limited external financing, elevated debt levels, and the conflict in the Middle East, the outlook remains uncertain. To boost economic growth, sustain poverty reduction, and keep public debt at sustainable levels, Tunisia would benefit from engaging in fiscal adjustment, improving the business environment, and facilitating competition.

Growth is expected to moderate slightly in 2026 but remain robust in the medium term, with expanded tourism capacity supporting exports, job creation, and poverty reduction. The fiscal deficit is projected to rise to 18.6 percent in 2026, driven by higher capital and current expenditure, then fall to 14.2 percent by 2028 as infrastructure spending decreases. Fiscal, external, and climate risks abound.

Fiscal and monetary policies were loosened ahead of the 2025 elections, slowing the improvements in macroeconomic stability achieved in recent years. Growth is projected to strengthen in 2026–2027 and surge in 2028 as oil production begins. Ensuring that future oil wealth supports inclusive and sustainable development will require strengthening institutions, enforcing fiscal rules, and improving the targeting of social spending.

The economy is estimated to have grown 1.3 percent in 2025, following an expansion of 4.7 percent in 2024. Fiscal consolidation is needed as debt-to-GDP is projected to stabilize around 77 percent over the medium term. Structural reforms, including in revenue mobilization, the financial sector, and social protection, are critical for building fiscal buffers, creating formal jobs, and accelerating poverty reduction.

Growth accelerated to 4.2 percent in 2025 as higher remittances and lower inflation supported consumption, but it is expected to slow to 3.7–3.8 percent over 2026–2028 as remittance growth decelerates. Low investment and a segmented, low-productivity labor market result in persistently high poverty. Quality investments in infrastructure and human capital and a stronger rule of law would boost growth and job creation.

Belize’s economy has stabilized but remains vulnerable to energy prices, climate risks, and business constraints. In 2025, growth slowed, fiscal balances weakened, but inflation eased, and unemployment fell. Poverty is declining but higher in rural areas and among children and Maya communities. A modest recovery, low inflation, narrower current account deficit, adequate reserves, and declining debt are expected in the medium term.

On January 1, 2026, Bulgaria adopted the euro after meeting all criteria for eurozone membership in early 2025. Thanks to strong domestic consumption and investment, the economy has remained resilient despite a challenging external environment. However, the global energy price shock due to the conflict in the Middle East will push inflation up and stunt economic growth in 2026. The fiscal position warrants close monitoring amid ongoing political uncertainty.

This statement, delivered by Sjoerd Sjoerdsma, Minister for Foreign Trade and Development Cooperation of the Kingdom of the Netherlands, on behalf of Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Georgia, Israel, Moldova, Montenegro, the Netherlands, North Macedonia, Romania, and Ukraine, to the 113th Meeting of the Development Committee on April 16, 2026, underscores the growing fragmentation and uncertainty shaping the global development landscape. It highlights the severe humanitarian, economic, and security impacts of Russia’s war against Ukraine, the destabilizing effects of the conflict in the Middle East on energy markets and trade routes, and the compounding pressures from rising debt, shrinking fiscal space, climate shocks, and rapid technological change. In this environment, the statement reaffirms the World Bank Group’s (WBG) unique role in combining finance, knowledge, private capital mobilization, and country presence to support stability, resilience, and long‑term prosperity. It strongly supports the focus on building prosperity through policy and on creating an enabling environment for sustainable job creation, stressing that jobs depend on strong institutions, sound macroeconomic frameworks, effective governance, and integration into global and regional markets. The statement calls for strengthened debt solutions, enhanced capital adequacy frameworks for MDBs, and scaled‑up private investment mobilization through IFC instruments anchored in development impact. It emphasizes climate action, resilience, and water security as integral to growth, highlights the WBG’s critical role in fragile and conflict‑affected settings, and reiterates unwavering support for Ukraine’s recovery and reconstruction. The statement concludes by reaffirming commitment to effective multilateralism, strengthened IDA implementation, and enhanced voice and legitimacy within the World Bank Group.