World Bank calls 2020s a ‘lost decade’ for global growth

World Bank Warns Poor Nations Are Ill-Positioned for AI Gains

The 2020s are becoming a “lost decade” for the global economy, and the world’s poorest countries risk falling even further behind as the wealth generated by artificial intelligence concentrates overwhelmingly in advanced economies, the World Bank warned in its June 2026 Global Economic Prospects report released this week.

“Barring a miracle, the 2020s will prove to be what their ominous opening foreshadowed: a lost decade,” wrote Indermit Gill, the World Bank’s chief economist, in the report’s foreword. The institution projects global growth will slow to 2.5 percent in 2026 — the weakest pace outside of outright recession in nearly 20 years.worldbank

A Decade of Compounding Shocks

The report traces how a rapid succession of crises — the COVID-19 pandemic, Russia’s invasion of Ukraine, the sharpest global inflation surge in a generation, a historic rise in interest rates, and now a Middle East conflict — left developing economies no room to recover between blows. Government debt across the developing world has surged to all-time highs, and private investment growth in the 2020s has more than halved relative to the previous decade.fortune

By the end of 2026, one-quarter of all developing economies, one-third of low-income economies, and half of fragile and conflict-affected states will be poorer than they were before the pandemic. Nearly one out of every two developing economies since 2019 has failed to close the income gap with the wealthiest nations.fortune

The AI Divide

While AI adoption rates rose across all developing regions in the second half of 2025, the World Bank finds the gains are dangerously uneven. Developing economies account for less than one-quarter of global data-center capacity, and the world’s 24 poorest economies hold less than one-tenth of one percent. The languages of roughly half the world’s population remain poorly represented in the training data of leading AI models.fortune

“Unless such gaps are closed, the AI revolution could widen rather than narrow the gap between rich and poor countries,” Gill wrote. Stanford’s 2026 AI Index Report corroborates the divide, finding a strong positive correlation between AI adoption and GDP per capita, with South Asia and sub-Saharan Africa reporting the lowest usage rates.stanford

Pathways Forward

The report is not entirely a diagnosis of failure. Gill argued that three forces — AI, clean energy, and deeper regional trade — could make the 2030s the most prosperous decade in half a century if governments act now. Global investment in clean energy hit a record $2.2 trillion in 2025, and regional trade agreements now cover 60 percent of global commerce.worldbank

But the window is narrowing. “For light at the end of the tunnel,” Gill wrote, “you’d have to look to the 2030s”.fortune