**Title: US-Iran Conflict Projected to Slow Global Economic Growth, Warns World Bank**
**Published: June 11, 2026**
The ongoing conflict in the Middle East, particularly between the United States and Iran, is expected to significantly hinder global economic growth, bringing it to its slowest rate since the COVID-19 pandemic, according to a recent report by the World Bank. The institution has revised its global growth forecast for 2026 down to 2.5 percent, a decrease from the 2.9 percent projected earlier this year.
In its latest Global Economic Prospects report, released on Thursday, the World Bank attributed this downturn to escalating energy prices, rising inflation, and increased borrowing costs, all of which have been exacerbated by the conflict. The report highlights the economic repercussions of the fragile ceasefire between the U.S. and Iran, which remains precarious and could easily deteriorate.
The World Bank's analysis indicates that the closure of the Strait of Hormuz—an essential channel for oil and gas transport—by Iran in response to U.S. and Israeli military actions has placed considerable strain on global energy supplies and broader supply chains. As a result, the institution projects that the average price of Brent crude oil, the international benchmark, will rise to $94 per barrel this year, representing a 36 percent increase compared to last year's average.
Furthermore, the report warns that fertilizer prices are also expected to surge, leading to higher food prices globally. The overall impact of these developments is anticipated to push global inflation to 4 percent in 2026, up from 3.3 percent the previous year. The World Bank cautions that if energy supply disruptions continue or worsen, global growth could plummet to as low as 1.3 percent, with inflation potentially reaching 4.4 percent.
The World Bank's projections also reveal that two-thirds of countries have seen their growth forecasts downgraded since January, with developing nations particularly vulnerable to the economic fallout. Ajay Banga, president of the World Bank Group, emphasized the challenges faced by developing countries, noting that while the impact varies by nation, the overarching goal remains to protect people and maintain stability without sacrificing future growth and job creation.
Looking ahead, the World Bank anticipates a slight recovery in global growth, projecting it to improve to 2.8 percent in 2027. However, this figure still falls short by 0.4 percentage points compared to the average growth rate observed during the 2010s, a period marked by recovery from the global financial crisis.
In response to the economic challenges posed by the Middle East conflict, the World Bank has committed to providing assistance to developing countries affected by the situation. The organization has allocated up to $60 billion to support these nations and has indicated that this figure could rise to $100 billion if the conflict persists.
As the situation in the Middle East continues to evolve, the implications for the global economy remain significant, with the World Bank's report serving as a stark reminder of the interconnectedness of geopolitical events and economic stability worldwide.