The World Bank has cut its 2026 global growth forecast to 2.5%, the weakest pace since the pandemic, citing ongoing economic fallout from the Middle East war and its impact on energy exports and prices. In its baseline scenario, Brent crude oil averages $94 per barrel this year, with global inflation hovering near 4%. While the US economy remains on track with a projected 2.2% growth—unchanged from January forecasts—two-thirds of the world’s nations saw their outlooks downgraded.

The bank warns of even steeper risks: a prolonged energy crunch could reduce global growth to 2.1%, and with added market stress, expansion could fall to just 1.3%. Developing economies are especially vulnerable, with regional growth projected at a post-COVID low of 3.6%. Many face a 'lost decade' of stalled economic catch-up with wealthier nations.

India stands out as a rare bright spot, with GDP expected to grow 6.6% in 2026. In contrast, the Middle East’s growth forecast dropped to 1.6%. World Bank chief economist Indermit Gill emphasized the disproportionate toll of conflict, stating, 'War anywhere is bad for poor people everywhere.'