The World Bank has reduced its global economic growth forecast for 2026 to 2.5%, citing the impact of conflict in the Gulf region on the world economy.
According to sea-news.az citing Zeit, the institution’s updated report states that if this scenario materializes, the global economy could experience its weakest growth period since the COVID-19 pandemic.
Key factors behind the downgrade include high inflation, rising energy prices, and serious disruptions in shipping and commodity trade through the Strait of Hormuz amid the Iran-related conflict. The report warns that continued supply chain disruptions could further worsen the situation.
Under a more negative scenario, global economic growth in 2026 could fall to 1.3%, while inflation may rise to 4.4%.
The World Bank also notes that the impact of the crisis is being felt more severely in developing and low-income countries. According to its estimates, by the end of the year, around one quarter of developing economies could remain below their 2019 income levels.
In response, the World Bank announced a $50–60 billion support package for developing countries, partly redirected from existing projects.
The OECD and the IMF have also recently lowered their global growth forecasts, warning of similar risks to the world economy.
