World Bank, IMF warn of 800 million jobs deficit

The World Bank and the International Monetary Fund (IMF) have warned that the global economy faces a projected shortfall of 800 million jobs over the next 10 to 15 years, as rising debt burdens, geopolitical tensions and limited fiscal space threaten economic growth and development.

The institutions called on governments to mobilise private investment, strengthen development financing and accelerate job creation to absorb the growing workforce, particularly in developing economies.

World Bank Group President Ajay Banga gave the warning at the 2026 Annual Meetings of the IMF and World Bank Group in Bangkok, Thailand, on Friday, citing projections that about 1.2 billion young people in developing countries would enter the labour market over the next decade to 15 years.

However, only about 400 million jobs are expected to be available to absorb them, leaving a potential deficit of 800 million jobs.

“The jobs gap is a projection. It does not have to be our future,” Banga said, stressing the need for a development financing model capable of generating employment on a scale commensurate with the growing workforce.

He warned that failure to address the challenge could have far-reaching economic and social consequences, while expanding employment opportunities would strengthen household incomes, improve living standards and support economic stability.

“A job is not a statistic. A job is dignity,” he said.

Banga said the employment challenge had become more urgent as governments grappled with rising debt obligations, high living costs and competing development priorities, leaving limited resources for infrastructure, healthcare, education and other growth-enhancing investments.

He advocated a financing framework that combines public funding, private capital, philanthropy and technology, with the appropriate mix depending on countries’ development needs and investment conditions.

According to him, public and concessional financing would remain essential in countries where investment risks are high and private markets are unable to provide adequate funding. As economies strengthen, private investment and access to capital markets should play a greater role.

Banga disclosed that the World Bank Group had increased the private capital it mobilised from about $35 billion in the 2022 financial year to $112 billion in the most recent financial year.

Combined with its own financing, total funding exceeded $230 billion, he said, adding that private capital mobilisation had nearly tripled in lower-middle-income countries, quadrupled in upper-middle-income economies and more than doubled across Africa.

He identified infrastructure and energy, agribusiness, healthcare, tourism and value-added manufacturing as priority sectors for boosting productivity and creating jobs.

The World Bank president also highlighted the role of micro, small and medium-sized enterprises, particularly in fragile and conflict-affected economies, where small businesses can support employment and economic resilience.

On development finance, Banga said six multilateral development banks were working to establish common mechanisms for assessing, packaging and transferring investments, allowing other investors to acquire assets from projects initially financed by development institutions.

The initiative is expected to free up capital for new projects and enable development banks to expand financing beyond the constraints of their balance sheets.

Meanwhile, IMF Managing Director Kristalina Georgieva warned that rising public debt, geopolitical tensions and energy supply disruptions were heightening global economic uncertainty.

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She urged highly indebted countries to adopt credible medium-term fiscal consolidation plans while protecting vulnerable households and implementing structural reforms to support sustainable growth.

Georgieva also cautioned that inflationary pressures and the rapid expansion of artificial intelligence could create financial stability and cybersecurity risks, underscoring the need for stronger international cooperation.

The warnings highlight the growing pressure on policymakers to balance debt sustainability with increased investment in productive sectors, as developing economies prepare to accommodate millions of new entrants into their labour markets.

Both institutions stressed that sound fiscal management, private-sector participation and technological innovation would be critical to sustaining growth and preventing the projected jobs deficit from deepening poverty and economic insecurity.