The World Bank slashed on Thursday its global growth forecast for 2026 to 2.5% due to the war in the Middle East, warning growth could slow to just 1.3% if energy supply disruptions prove more severe and come with substantial stress in financial markets.
Global growth reached 2.9% in 2025, the bank said in its semi-annual Global Economic Prospects, up 0.2 percentage points from its estimate in January.
Its 2026 forecast is down 0.1 percentage point from January, the lowest seen since the COVID-19 pandemic that began in late 2019.
The bank lowered forecasts for two-thirds of countries as a result of the war, with the biggest cuts affecting the United Arab Emirates (UAE), Iraq and other countries in the Middle East whose energy exports have been hit hard by the conflict.
The World Bank's stark outlook comes as the war launched by U.S. and Israeli strikes on Iran on Feb. 28 drags into a fourth month.
