Dubai, UAE — The conflict in the Middle East is expected to slow global growth to its lowest rate since the onset of the COVID-19 pandemic, according to the World Bank’s latest Global Economic Prospects report.
The World Bank forecast global growth of 2.5% in 2026, down from 2.9% in 2025. Forecasts for two-thirds of economies were downgraded compared with January.
Global growth is expected to improve to 2.8% in 2027 but remain 0.4 percentage point below the average recorded during the 2010s.
The report said weak growth in developing economies has stalled progress toward advanced-economy income levels. By 2028, developing economies excluding China and India will have collectively experienced nearly a decade without progress in narrowing their per-capita income gap with advanced economies.
“Developing countries have faced a series of challenges over the last decade,” World Bank President Ajay Banga said.
“The impact differs by country, but the basic test is the same: protect people and preserve stability today, without giving up on growth and jobs tomorrow.”
The World Bank said downside risks remain significant.
If energy supply disruptions prove more severe than currently assumed and are accompanied by substantial financial stress, global growth could fall to 1.3% in 2026, while inflation could rise to 4.4%.
The institution said it is making up to $50 billion-$60 billion available through existing instruments, including $25 billion of pre-arranged financing, to support countries affected by the crisis.
More than 30 countries are currently working with the World Bank Group to enhance readiness and enable a rapid response under the programme.
If the conflict and its economic fallout persist, support could be increased to between $80 billion and $100 billion over 15 months.
The report said South Asia is expected to remain the fastest-growing region in 2026, although growth is forecast to slow to 6.3% from 7% in 2025.
Growth in Sub-Saharan Africa is also expected to slow, with inflationary pressures driven in part by higher food prices linked to fertilizer shortages and price increases.
