World Bank: Middle East Conflict Slows Global Growth


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- The conflict in the Middle East is expected to slow 
global economic growth to its weakest pace since the COVID-19 pandemic, as 
higher energy costs fuel inflation and keep borrowing costs elevated, according 
to the World Bank's latest Global Economic Prospects report.

   The World Bank lowered its forecast for global growth to 2.5% in 2026 from 
2.9% in 2025, citing weaker outlooks across roughly two-thirds of economies. 
The report assumes disruptions tied to the closure of the Strait of Hormuz 
begin easing later this year but warns energy markets remain vulnerable.

   For the United States and other major consuming economies, the report points 
to higher crude oil and fertilizer prices as key inflation risks that could 
pressure household spending and business activity while complicating the path 
for interest rate cuts. Brent crude oil is projected to average $94 bbl in 
2026, up 36% from 2025 under the report's baseline scenario.

   Global inflation is expected to rise to 4.0% this year from 3.3% in 2025, 
while developing economies are forecast to post their weakest growth rate since 
the pandemic recovery period.

   The World Bank warned downside risks remain elevated. In a more severe 
disruption scenario combined with financial market stress, global growth could 
slow to 1.3% in 2026 while inflation accelerates further.

   The institution said it stands ready to provide up to $100 billion over 15 
months to support affected countries if economic conditions worsen.




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