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.
