World Bank Global Economic Prospects (June 2026): Middle East conflict slows 2026 growth to 2.5%Higher energy prices slow the world economy to its lowest growth since the pandemic
On June 11, 2026 the World Bank published its Global Economic Prospects. Higher energy prices from the conflict in the Middle East, together with steeper inflation and higher borrowing costs, are forecast to slow global growth from 2.9% in 2025 to 2.5% in 2026, the lowest rate since the onset of the COVID-19 pandemic. Growth improves to 2.8% in 2027 but stays 0.4 percentage point below the 2010s average.
Key points
- Global growth is forecast at 2.5% in 2026 and 2.8% in 2027; forecasts for two-thirds of economies were downgraded relative to January
- The closure of the Strait of Hormuz has severely disrupted energy markets: Brent crude is projected to average $94 a barrel in 2026, 36% above 2025, assuming the worst disruptions abate in July; global inflation rises from 3.3% in 2025 to 4.0% in 2026
- Growth in developing economies drops to a post-pandemic low of 3.6% in 2026 from 4.4% in 2025, then recovers to 4.2% in 2027; directly affected Gulf economies fall from 3.9% in 2025 to close to zero in 2026
- In the downside case, with more severe energy supply disruptions and substantial financial stress, global growth could fall to 1.3% in 2026 and inflation rise to 4.4%
- Special-focus chapters analyse debt, which in developing economies has climbed from under 40% to over 70% of GDP since 2010 and drives up borrowing costs, and the fiscal vulnerability of commodity exporters
What to do in practice
- Check your cash flow with higher energy and raw material prices and borrowing costs built in
- Check the changes since January for the regions where you have customers or operations
The World Bank, an international organisation, has published its outlook for the world economy. Because the conflict in the Middle East pushes up energy prices and other prices, world growth in 2026 is expected to be 2.5%, the lowest since the pandemic began. The impact is said to be especially big on developing countries.
- (1) StraitThe closure of the Strait of Hormuz disrupts energy markets
- (2) Prices upThe prices of crude oil and fertilizer rise
- (3) InflationPrices around the world rise faster
- (4) GrowthWorld growth slows to 2.5%
Points
- World growth is expected to be 2.5% in 2026 and 2.8% in 2027
- The pace of price rises is expected to climb from 3.3% in 2025 to 4.0% in 2026
- Growth in developing countries is expected to be 3.6% in 2026, the lowest since the pandemic
What the words mean
- crude oil
- oil as it comes out of the ground, before it is refined
- developing countries
- countries whose economies are still in the middle of developing
The conflict in the Middle East is expected to slow global growth to the lowest rate since the onset of the COVID-19 pandemic amid higher energy prices, steeper inflation, and increased borrowing costs, according to the World Bank Group’s latest Global Economic Prospects report. Global growth is forecast to slow to 2.5% in 2026, down from 2.9% in 2025.
Economic news presents published statistics and outlooks. It is not investment solicitation or trading advice. Figures are as of publication and may be revised.
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