World Bank sees global growth at 1.3% in 2026 on Middle East war
This digest was compiled by AI from multiple sources — links to the originals are below.
The World Bank's chief economist projects global economic growth could fall to 1.3% in 2026 if the Middle East conflict escalates further. The forecast represents a sharp downgrade from the bank's previous estimate of 2.7%.
The Forecast
The World Bank's chief economist, Indermit Gill, stated on Tuesday that an escalation of the Middle East war could reduce global GDP growth to 1.3% in 2026, down from a baseline of 2.7%. The projection assumes a 50% increase in oil prices and a 30% decline in trade volumes through the Suez Canal. Gill emphasized the uncertainty, noting that the actual impact depends on the conflict's duration and intensity.
Regional Impact
The Middle East and North Africa region would be hit hardest, with growth potentially contracting by 1.2 percentage points. Oil-importing nations in South Asia and Sub-Saharan Africa face heightened inflation and fiscal strain. The bank warned that a prolonged conflict could push 26 million people into extreme poverty globally.
What's Next
The World Bank is set to release its full Global Economic Prospects report in October. It remains unclear whether diplomatic efforts can de-escalate the conflict before the projected effects materialize.
1 source
World Bank sees global growth at 1.3% in 2026 on Middle East war
