The World Bank and the International Monetary Fund are warning that tensions in the Middle East are increasingly impacting the global economy. Both institutions lowered their key growth forecasts for 2026 on Thursday and warned that higher energy prices, market uncertainty, and inflationary pressures could significantly complicate future developments.
In its latest Global Economic Prospects report, the World Bank lowered its estimate of global growth in 2026 to 2.5 percent. At the same time, it warned that if there were further disruptions to energy supplies and tensions spilled over into financial markets, global economic growth could slow to as low as 1.3 percent.
According to the World Bank, the conflict is primarily reflected in rising energy prices. This increases inflationary pressures and strengthens the likelihood of tighter monetary policy, which could particularly affect countries dependent on energy imports. The report also anticipates that commodity prices could rise by 22 percent this year.
In addition to the risks, the World Bank also mentions one positive factor. It believes that increased investment in artificial intelligence could help support economic activity and partially mitigate the impact of a worsening global outlook.
The International Monetary Fund took a similar approach. It lowered its growth forecast for the Eurozone for 2026 from 1.1 percent in April to 0.9 percent. At the same time, it raised its inflation estimate for the Eurozone to 2.8 percent. According to the IMF, the main reason is higher energy costs, which are reflected in both business costs and consumer prices.
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