US-Iran war to pull global economy to post-COVID low: World Bank
Summary
The World Bank warns that the US-Iran conflict will slow global economic growth to its lowest point since the COVID-19 pandemic. Rising energy prices, inflation, and supply disruptions, especially from the closure of the Strait of Hormuz, are major reasons for this slowdown.Key Facts
- The World Bank lowered its global growth forecast for 2026 from 2.9% to 2.5%.
- Energy prices, including oil, have risen sharply; Brent crude oil is expected to average $94 a barrel this year.
- Inflation worldwide is expected to rise to 4%, up from 3.3% last year.
- The Strait of Hormuz, a key route for oil and gas, has been closed due to the conflict, disrupting supply chains.
- Growth could fall to as low as 1.3% if energy supply problems get worse, with inflation reaching 4.4%.
- Developing countries face the biggest economic challenges from this conflict.
- The World Bank has reduced growth forecasts for about two-thirds of countries since January.
- The World Bank is ready to provide up to $60 billion, and possibly $100 billion if needed, to help affected developing countries.
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