World Bank projects global growth to slow to six-year low in 2026

The World Bank said global economic growth is expected to slow to 2.5% in 2026, the weakest pace since the start of the Covid-19 pandemic, citing the impact of conflict in the Middle East. According to the bank's Global Economic Prospects report, growth is forecast to ease from 2.9% in 2025, with projections for about two-thirds of the world's economies revised downward compared with January estimates. The report said global growth could recover modestly to 2.8% in 2027, but would remain 0.4 percentage points below the average recorded in the first decade of the 2000s. Higher energy prices, accelerating inflation and rising borrowing costs were identified as the main factors weighing on growth. The bank warned that a closure of the Strait of Hormuz would cause serious disruption in energy markets, with Brent crude averaging $94 a barrel in 2026, a 36% increase from 2025. Global inflation is projected to rise to 4% this year, while growth in developing economies is expected to fall to 3.6%, the weakest post-pandemic level. The bank also cautioned that a larger energy supply shock could push global growth down to 1.3%.