The World Bank published its latest Global Economic Prospects report, reducing its 2026 global economic growth forecast to 2.5 percent. This marks a decrease from a January projection of 2.9 percent.
The organization cited rising energy prices, increasing inflation, and higher borrowing costs as reasons for the revised global growth forecast. The World Bank warned that the Middle East conflict could reduce global economic growth to its lowest rate since the COVID-19 pandemic. It projected that a closure of the Strait of Hormuz could increase global inflation to 4 percent in 2026, up from 3.3 percent in 2025. Worsening energy supply disruptions could lower global growth to 1.3 percent in 2026 and raise global inflation to 4.4 percent.
The World Bank projects Brent crude oil prices will average $94 per barrel in 2026, which is 36 percent higher than the previous year. Fertilizer prices are also forecast to rise in 2026, which would lead to increased food prices. The Bank downgraded economic growth forecasts for two-thirds of countries since January 2026. The 2027 growth projection of 2.8 percent is 0.4 percentage points below the average growth rate of the 2010s.
The Bank allocated up to $60 billion to assist developing countries experiencing economic impacts from the conflict. It stated that financial assistance could increase to $100 billion if the conflict continues. President Ajay Banga said, "Developing countries have faced a series of challenges over the last decade. The impact differs by country, but the basic test is the same: protect people and preserve stability today, without giving up on growth and jobs tomorrow." The report also states that, excluding China and India, developing nations have not substantially narrowed the per capita income gap with wealthy nations over the past decade.
No independent assessment of World Bank’s claims was available.