2025 was not a good year for emerging markets and developing economies (EMDEs). It saw a new normal emerge of a world with slow growth, trade wars, overwhelming debt service burdens, collapsing aid, global warming, natural disasters, and conflict.

Amid this litany of woes, it is easy to forget that there were also positive developments. In this commentary, I focus on areas of significant year-over-year progress in EMDEs. This progress may have been slower than potential, but it is nevertheless worth celebrating.

10 positive economic outcomes in EMDEs in 2025

1. A growing middle class. In spite of slowing growth, about 108 million additional citizens in EMDEs were able to join the ranks of the middle class in 2025, according to data from the World Data Lab. (Disclosure: I am a co-founder of World Data Lab and its Chief Economist.) Most of these new entrants were in South and South East Asia, but Africa and Latin America also saw an increase in their middle-class populations. Globally, the middle class accounted for over half the world’s population for the first time ever.
2. An expansion of trade. International trade grew strongly in 2025, notwithstanding tariff wars, protectionist measures, and onshoring policies. UNCTAD’s nowcast suggests that global trade in goods and services will exceed $35 trillion in 2025, a rise of 7% over 2024. East Asia’s growth led the way, but African exports also grew strongly—faster than China’s, for example. As one example, Africa led all regions with a 10% rise in tourist arrivals through the first three-quarters of the year. Overall, services growth and South-South trade were leading drivers for EMDE exports.
3. Faster green energy transitions. In 2025, low-carbon energy transitions in EMDEs became driven by the private sector—utility-scale firms and individual households—responding to lower prices for solar cells and panels. Between August 2022 and August 2025, the average export price of Chinese cells fell from $0.19/W to $0.03/W. Previously, investments depended on government policy, incentives, and publicly mobilized financing. As Tim Appenzeller writes in Science magazine: “That change in motivation may be the most important breakthrough of all, ensuring that this year’s inflection points are just the beginning.”

The scale and speed of the energy transition are impressive. Globally, in the first half of 2025, renewables accounted for a higher share of electricity (34.3%) than coal (33.1%) for the first time ever. This trend was driven by EMDEs: The U.S. and Europe used more coal in 2025 as renewables did not keep pace with demand. China’s story is well-known, but India also added a record 29.5 GW of solar capacity in the first nine months of the year. Similarly, Pakistan has installed around 18GW of solar panels and is on track to produce 20% of its electricity from solar in 2026, compared to 1% in 2023. The focus on renewables spreads well beyond these examples. In Africa, 29 African governments launched National Energy Compacts in 2025 to accelerate energy access and security as part of the newly formed M300 initiative of the World Bank and the African Development Bank.

4. Peaking global greenhouse gas emissions. It is still too early to tell, but it is possible that 2025 will mark the year when global greenhouse gas emissions flatten or decline. Climate TRACE, a non-profit coalition estimating real-time emissions, showed declining emissions in the early part of 2025 but now a very small increase of 55% in 2025 over 2024, perhaps because of data center use. The start of a downward global trend in emissions would be very good news for EMDEs. They bear the brunt of the natural disasters generated by climate change due to poor infrastructure, vulnerable populations, and reliance on agriculture. The World Resources Institute reckons the world is projected to warm by 2.3-2.9 °C; a dangerous prospect, and a far cry from the Paris 1.5 degree target, but roughly half of what was anticipated when the Paris Agreement was made a decade ago.
5. Signs that multilateralism can still work. The reports of the death of multilateralism in 2025 were exaggerated. True, some events disappointed, notably the shelving of previously-agreed-upon maritime emissions levies, and the adjournment of talks on a global plastics pollution treaty, but there were examples of success in other areas. A High Seas treaty protecting biodiversity beyond national jurisdictions (BBNJ) was ratified and will legally enter into force in January 2026, providing an established process for marine protected areas and other matters. Both the World Bank and IMF successfully shored up support from their major shareholder, the United States. The International Finance Corporation launched an inaugural collateralized loan obligation, establishing a new class of assets in EMDEs with the potential to reach scale by tapping into global institutional investors.
6. Business is still investing in sustainability. Despite reports to the contrary and a clear rollback in public policy requirements in the U.S. and Europe, business is still investing in sustainability. The green debt market surpassed $3 trillion in 2025 and, notwithstanding some slowdowns in the U.S. and Europe, issuances in the Asia Pacific region have strongly trended upward. Cost reductions and revenue growth drive corporate sustainability efforts, and there was solid growth in assets and returns in ESG funds in 2025, with particular interest from younger investors.
7. Inflation and food price increases are being held in check. While negative news on inflation dominated headlines in several advanced economies, EMDE inflation in 2025 was the lowest since the IMF began its tracking in 2016. While there are regional differences, 12-month trailing inflation in Africa is ending the year at half its 2024 level. Some of this is attributable to low prices for traded foodstuffs. The FAO’s commodity price index shows declines in 2025 of the nominal international prices of cereals, dairy, and sugar.
8. Going digital. After a slow start in building digital infrastructure backbones, developing countries are catching up to the rest of the world. According to the 2025 State of Digital Public Infrastructure report, as of 2025, at least 64 countries (including advanced economies) have DPI-like digital ID systems, 97 countries have DPI-like digital payment systems, and 103 countries have DPI-like data exchange systems, with many more in the planned or piloting stage. According to the same report, “Africa, Asia, and Latin America, and the Caribbean have the most dynamic and rapidly evolving picture for deployments …”
9. Better nutrition. School meals have long been recognized as highly impactful for nutrition, learning, and overall child well-being. The latest State of School Feeding Worldwide report, released in 2025, finds that 466 million children worldwide receive school meals, with almost half of all primary school children covered. 60% more children are being reached in low-income countries compared to two years ago. Almost all the funding is from national government budgets, suggesting that school meals might escape the effects of the sharp aid reductions of 2025.
10. More useful weather forecasting. The Extraordinary World Meteorological Congress in October 2025 reported on its shift to go beyond assessing “what the weather will be” to “what the weather will do to lives, infrastructure and livelihoods,” by integrating AI into its operational forecasts. The Early Warnings for All initiative, aimed at providing coverage of multi-hazard forecasts to all people by 2027, had an “unprecedented pace of progress” in 2025, with new pilots and capacity-building projects aimed at developing countries.

All is not well for people living in developing countries. But 2025 did see progress, at considerable scale, in a range of areas. Sustainable development practitioners should celebrate the positives while continuing to advocate for faster progress.