Global Economic Growth Forecast Lowered Amidst Iran-Israel Conflict

Washington DC. The global economy's growth rate is estimated to reach its weakest level since the COVID-19 pandemic due to the ongoing US-Israel war with Iran.

According to a new report released by the World Bank, global economic growth will be limited to 2.5 percent in 2026. This is significantly lower than in 2025. Last year, the global economy grew by 2.9 percent.

The report warns that the situation could become more serious if the war escalates further or if goods and energy supplies are disrupted for a long time. According to the World Bank, rising hostile activities could further increase the prices of energy, food, and other goods, which will intensify inflation, food insecurity, and financial crises.

If the disruption in energy supply becomes more severe than expected and the financial sector also comes under pressure, the World Bank has warned that global economic growth could fall to 1.3 percent in 2026. Due to the Iran war, the Strait of Hormuz, a crucial global maritime trade route, is almost paralyzed. As a result, the prices of oil, natural gas, and fertilizers have rapidly increased worldwide due to supply shortages.

The World Bank estimates that the growth of all developing economies will be weaker in 2025 compared to 2024. The report states that it may take until after 2028 for per capita income in developing countries, excluding China and India, to return to pre-COVID-19 pandemic levels. According to economists, the rise in energy and food prices will most affect poor and import-dependent nations.