The escalating conflict in the Middle East is set to drag global economic growth to its weakest pace since the COVID-19 pandemic, as higher energy prices, rising inflation and increased borrowing costs weigh on economies worldwide, the World Bank has warned.
In its latest Global Economic Prospects report released on Thursday, the World Bank downgraded growth forecasts for nearly two-thirds of economies and projected global growth to slow to 2.5 percent in 2026 from 2.9 percent in 2025.
The lender said the slowdown would mark the weakest global growth rate since the pandemic and leave economic expansion well below pre-pandemic averages even as growth recovers slightly to 2.8 percent in 2027.
According to the report, the closure of the Strait of Hormuz has severely disrupted global energy markets, sending oil prices sharply higher and intensifying inflationary pressures across countries.
The World Bank projects Brent crude oil prices to average $94 per barrel in 2026, about 36 percent higher than in 2025, assuming the most severe supply disruptions ease in July.
