The World Bank has revised its global growth forecast to 2.5% in 2026, citing the Middle East war's impact on commodity flows and import costs.
The Washington-based lender's report warns that two-thirds of economies are facing a hit, with energy prices surging 50% since the US-Israeli attack on Iran in February.
Chief Economist Indermit Gill described the situation as 'the biggest supply shock in more than 50 years,' with food prices potentially affected if the conflict persists.
The bank predicts Brent crude will average $94 a barrel this year, leading to a 4% global headline inflation forecast, potentially rising to 4.4% in a prolonged war scenario.
Emerging and developing economies have been particularly hard hit, with per-capita incomes in these countries expected to take nearly a decade to recover from the pandemic.
The World Bank is stepping up support for weaker economies, making up to $60 billion in credit available and working with over 30 countries to enhance readiness and respond to the crisis.
