World Bank cuts global growth outlook to 2.5%, warns of drop to 1.3% if war fallout spreads to markets
The bank warned growth could fall to 1.3% if energy disruptions worsen and said it may provide up to $100 billion in aid.
- On Thursday, The World Bank reported that economic fallout from the Iran war will drag global growth to its weakest performance since the COVID-19 pandemic six years ago, reaching just 2.5% this year.
- Iran responded to United States and Israeli attacks in Feb by closing the Strait of Hormuz, through which a fifth of the world's oil and natural gas passes; the Persian Gulf also faces fertilizer trade disruptions.
- Developing and emerging markets face a post-pandemic low of 3.6% growth in 2026, as The World Bank downgraded forecasts for two-thirds of global countries, including European nations and India, which expects 6.6% expansion.
- The United States remains insulated from downgrades, with the World Bank expecting 2.2% growth this year, as energy production, tax cuts, and artificial intelligence investment shield the economy from broader global pressures.
- Americans remain frustrated by higher gasoline and other prices despite U.S. economic resilience, as the 189-country agency warns the global economy will struggle with conflict consequences throughout 2026.
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82 Articles
Ongoing tensions in the Middle East are having a profound impact on the global economy. The World Bank has lowered its global economic growth forecast for 2026 to 2.5 percent. This reduction is primarily due to the uncertainty and rising energy prices caused by increased tensions between Iran, Israel, and the United States.
Developing Economies Face a 'Lost Decade' as Iran War Drives Global Economic Strains, World Bank Warns
The lender downgraded growth forecasts for roughly two-thirds of the world's economies, citing disruptions to energy markets and trade routes linked to the conflict
World Bank Says The Iran War Is Throttling Global Growth
The World Bank cut its global growth forecast on Thursday, blaming the Iran war and the energy shock it has unleashed. The bank now sees the world economy expanding 2.5 percent this year, down from 2.9 percent in 2025 and the weakest pace since the pandemic. It warned that growth could sink to just 1.3 percent if energy supply disruptions prove worse than assumed and trigger financial stress. Oil, gas and fertilizer prices have all spiked while …
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