World Bank: Middle East Conflict Slows Global Growth to 2.5%

The World Bank Group's latest Global Economic Prospects report, released on Thursday, forecasts that global growth will slow to 2.5% in 2026, the lowest rate since the COVID-19 era, primarily due to the ongoing conflict in the Middle East. The report highlights that two-thirds of economies have been downgraded since January 2026.

It anticipates a rise to 2.8% in 2027, which remains 0.4 percentage points below the average growth rate during the 2010s. The report also notes that developing economies, particularly China and India, will experience nearly a decade without progress in narrowing the per capita income gap with advanced economies.

The closure of the Strait of Hormuz is expected to disrupt energy markets, with Brent crude oil prices projected to average $94 per barrel in 2026, significantly higher than in 2025. Inflation is predicted to rise to 4.0% by March 2025.

Ajai Banga, President of the World Bank Group, emphasized the need for countries to protect their populations and maintain stability while fostering job growth and private sector solutions.