The World Bank has reduced its forecast for global economic growth in 2026 to 2.5%, highlighting that the US-Iran conflict has driven up energy prices, inflation, and borrowing costs. It warns that if the crisis intensifies, global economic growth could slow to just 1.3%.
On 13 June 2026, the World Bank released its latest Global Economic Prospects report, lowering its forecast for global economic growth in 2026 from 2.9% in January to 2.5%. This adjustment reflects the impact of the Middle East conflict, which has caused global energy prices, inflation, and borrowing costs to rise.
The report states that the war between the US and Iran, along with the fragility of the current ceasefire agreement, poses significant risks to the global economy. This could result in the slowest global economic expansion since the COVID-19 pandemic. It also warns that if energy disruptions worsen, global growth could drop to only 1.3% this year, while inflation might surge to 4.4%.
The report projects that Brent crude oil prices will average $94 per barrel this year, a 36% increase from last year’s average. Fertilizer prices are also expected to rise sharply, which may lead to higher global food prices. These factors are estimated to push global inflation up to 4% this year, compared to 3.3% last year.
Source: AFP