The World Bank has lowered its global growth forecast for 2026 to 2.5%, warning that escalating geopolitical tensions and prolonged disruptions to global trade and energy markets could further weaken the world economy.
In its latest outlook, the institution said the economic consequences of the conflict involving Iran, the United States, and Israel are expected to weigh heavily on global activity.
The World Bank cautioned that global growth could slow dramatically to as little as 1.3% if the conflict triggers broader financial market disruptions or prolonged supply-chain pressures.
Such an outcome would represent one of the weakest performances for the global economy in decades outside of major crises.
Despite the broader slowdown, India is still expected to remain among the fastest-growing major economies, with projected growth of 6.6%.
The United States was one of the few major economies spared a downgrade. The World Bank cited strong domestic energy production, investment linked to artificial intelligence, and supportive fiscal policies as factors helping the U.S. economy remain relatively resilient.
Nevertheless, the institution warned that higher energy costs and continued geopolitical uncertainty will likely weigh on consumer confidence and economic activity worldwide through 2026.
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The World Bank cut its outlook for global growth this year and said two-thirds of economies have seen prospects deteriorate as the Middle East war disrupts commodity flows and raises the cost of imports. https://t.co/YN0KaKRJX8
— Bloomberg (@business) June 11, 2026
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