WASHINGTON – Web Desk: The World Bank has warned that the ongoing Iran war in the Middle East and rising energy prices are pushing the global economy toward its lowest growth rate since the COVID-19 pandemic, according to a new report.
In its latest Global Economic Prospects report, the World Bank cut its 2026 global growth forecast from 2.9% to 2.5%. The institution stated that rising oil and energy prices, increasing inflation, and high borrowing costs have further complicated the global economic outlook. Tensions between Iran and the US, along with the closure of the Strait of Hormuz, have placed severe pressure on global energy supply chains.
The report projects that Brent crude oil prices could average $94 per barrel this year — 36% higher than last year — with fertilizer prices also expected to rise significantly, raising concerns about higher food prices worldwide. Global inflation could reach 4% in 2026, and if further energy supply disruptions occur, global growth could fall to just 1.3% with inflation reaching 4.4%.
World Bank President Ajay Banga stated that developing countries have faced multiple challenges over the past decade, and the current crisis has exacerbated these difficulties, requiring governments to balance public protection, economic stability, employment, and development. The institution announced a $60 billion aid package for countries affected by the Middle East conflict, which could be expanded to $100 billion if needed.
