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If the conflict persists, the next thing that will be affected is food prices'Author of the article:Last updated 1 hour ago You can save this article by registering for free here. Or sign-in if you have an account.The World Bank said it’s stepping up support this year for weaker economies at risk from the Mideast war. Photo by ERIC BARADAT/AFP via Getty ImagesThe World Bank cut its outlook for global growth this year and said two-thirds of economies have seen prospects deteriorate as the Middle East war disrupts commodity flows and raises the cost of imports.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThe world economy will expand 2.5 per cent in 2026, the Washington-based lender said in a report published Thursday. That’s down from a January forecast of 2.6 per cent, and would be the lowest figure since COVID-19 triggered a global recession in 2020.A surge in energy prices since the United States-Israeli attack on Iran in February is pushing up inflation and hurting countries that depend on imported fuel. The bank predicts that Brent crude will average US$94 a barrel this year, up some 50 per cent from its January projection.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“This is the biggest supply shock in more than 50 years,” said chief economist Indermit Gill. “If the conflict persists, the next thing that will be affected is food prices.”The bank said risks to its outlook are skewed to the downside. Global growth could fall to 1.3 per cent this year if “energy supply disruptions prove more severe than assumed and are accompanied by substantial financial stress.”The U.S. economy is expected to grow 2.2 per cent this year, unchanged from the January forecast, the bank said. China’s outlook was revised down to 4.2 per cent from 4.4 per cent.Global headline inflation is forecast to climb to four per cent this year, from 3.3 per cent in 2025, and could rise as high as 4.4 per cent in the event of a prolonged war. The World Bank Group headquarters in Washington.Emerging and developing economies have been hit especially hard by the repeated shocks of the 2020s, the bank said. Excluding India and China, per-capita incomes in these countries have lost ground relative to their wealthier peers since the pandemic and likely won’t recover it before 2028, “implying nearly a decade of lost income convergence.”Much of the hope for brighter global prospects in the 2030s hinges on artificial intelligence and its ability to boost productivity, according to the report. That could reverse a structural slowdown of the economy, and potentially turn the coming decade into “a golden era for job creation and growth.”Still, any positive impact may not be evenly shared between advanced and developing economies, with the latter having “weaker digital infrastructure and skills, and lower exposure of jobs to AI.”The World Bank said it’s stepping up support this year for weaker economies at risk from the Mideast war. Among measures cited in the report:The bank is making as much as US$60 billion in credit available through existing instruments, including US$25 billion of pre-arranged financingMore than 30 countries are actively working with the bank “to enhance readiness and enable a rapid response to the crisis”The bank added that it could scale up its support to between US$80–100 billion over 15 months Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.