BAKU, Azerbaijan, June 27. Emerging and
developing economies are expected to expand faster than advanced
economies in 2026, continuing the long-term convergence trend in
the global economy. According to the International Monetary Fund's
forecasts, emerging and developing economies are projected to grow
by around 4%, compared with approximately 1.7% to 1.8% for advanced
economies.
Economists say the divergence reflects the long-standing
principle of economic convergence, under which lower-income
countries tend to grow faster by adopting existing technologies,
expanding infrastructure and increasing productivity, while
advanced economies face slower gains as they operate closer to the
technological frontier.
India is expected to remain one of the world's fastest-growing
major economies, with GDP forecast to expand by approximately
6% to 6.5% in 2026. Strong domestic consumption,
sustained infrastructure spending and continued manufacturing
investment are expected to support growth, while companies
relocating supply chains away from China continue to boost
industrial development.
Across Southeast Asia, countries including Vietnam, Indonesia,
Thailand and Malaysia are benefiting from the ongoing restructuring
of global manufacturing networks. Annual foreign direct investment
into ASEAN economies has remained above $200
billion in recent years, underscoring the region's growing
role as a diversified manufacturing and export hub rather than
simply a low-cost production base.
Technology is becoming an increasingly important driver of
growth across emerging economies. Analysts estimate that the global
digital economy now accounts for more than 15% of world
GDP, with artificial intelligence, digital platforms and
data-driven services playing an expanding role. In many developing
countries, the absence of legacy infrastructure has allowed
businesses to adopt new technologies more rapidly, particularly in
financial technology, logistics and retail.
Africa is also expected to maintain strong long-term growth
potential, supported by one of the world's youngest populations and
rapid urbanization. The continent's population has surpassed
1.5 billion, creating significant opportunities
for consumer markets, digital financial services and infrastructure
investment. However, inadequate transport networks, limited
electricity supply and financing constraints continue to weigh on
economic development across many countries.
Europe, by contrast, is expected to post modest growth of around
1%, constrained by aging demographics, weak
productivity gains and higher costs associated with the transition
toward greener and more digital economies. Nevertheless, the region
remains a global center for advanced manufacturing, financial
services and technological innovation.
At the same time, geopolitical tensions continue to reshape
global trade. Companies are increasingly prioritizing supply-chain
resilience over efficiency alone, accelerating investment in
regional manufacturing hubs and contributing to a broader
fragmentation of international trade flows.
Against this backdrop, digital transformation and the data
economy are becoming as important to competitiveness as capital
investment and labor availability. Azerbaijan is seeking to
position itself within this changing landscape by combining its
role as an energy exporter with expanding transport and logistics
infrastructure linking Europe and Asia. The country's non-oil
economy now accounts for 67% of GDP, reflecting
gradual progress toward economic diversification.
Economists say continued investment in logistics, digital
services and renewable energy projects could strengthen
Azerbaijan's position as regional trade routes evolve. More
broadly, emerging economies are expected to generate
roughly 65–70% of global economic
growth in 2026, even as advanced economies continue to
dominate innovation, financial markets and high-value
technologies.
The gap in growth rates is expected to persist over the medium
term, reinforcing a gradual shift toward a more multipolar global
economy in which emerging markets play an increasingly prominent
role.
