World Bank: US-Iran War Impact Could Make Global Economic Growth Worst Since COVID-19
The World Bank (WB) warns in its latest forecast that the US-Israeli war against Iran is significantly depressing global economic growth prospects, potentially leading to the slowest growth since the COVID-19 pandemic in 2020. The near-closure of the Strait of Hormuz is driving up costs for oil, gas, and fertilizers, risking long-term stagnation for dozens of developing countries.
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- 📰 Published: June 12, 2026 at 12:57
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(Central News Agency, Washington, 11th Combined Foreign News) The World Bank (WB) warned in its latest forecast report that the war by the United States and Israel against Iran is significantly lowering global economic growth prospects, and if the conflict is prolonged, dozens of developing countries could face years of economic stagnation.
According to the Washington Post, the World Bank's top economists predict global economic growth of only 2.5% this year, lower than the 2.9% growth rate of the past two years and the slowest since the outbreak of the COVID-19 pandemic in 2020.
The near-closure of the Strait of Hormuz since early March has led to soaring costs for oil, natural gas, fertilizers, and industrial chemicals. The World Bank calls this the "biggest supply shock in 50 years," putting pressure on both developing and developed economies.
Ayhan Kose, the World Bank's Deputy Chief Economist, said, "The global economy is not falling off a cliff, but the slowdown is clear. Many developing countries have fewer resources to deal with this shock and are less able to withstand it."
This latest forecast is more pessimistic than the World Bank's outlook from January of this year. At that time, the World Bank believed the global economy could largely weather the era of trade uncertainty caused by US President Trump's tariff policies.
World Bank experts have downgraded growth forecasts for about two-thirds of the world's countries, with particularly sharp downward revisions for Turkey, Bangladesh, and South Africa.
Countries adjacent to the Persian Gulf war zone are expected to be hit hardest. Kose stated that Kuwait, Iraq, and Qatar could see near-zero economic growth in 2026, and the United Arab Emirates is expected to have economic growth of only 2.4% this year, less than half the rate projected before the war began.
In its latest "Global Economic Prospects" (GEPs) report, the World Bank stated that the 2020s are almost certain to become a "lost decade" for dozens of developing countries. These countries have made no progress in narrowing the income gap with advanced economies, face long-term economic stagnation, and remain unable to catch up with the living standards of wealthy nations. (Editor: Chen Yiwei) 1150612
According to the Washington Post, the World Bank's top economists predict global economic growth of only 2.5% this year, lower than the 2.9% growth rate of the past two years and the slowest since the outbreak of the COVID-19 pandemic in 2020.
The near-closure of the Strait of Hormuz since early March has led to soaring costs for oil, natural gas, fertilizers, and industrial chemicals. The World Bank calls this the "biggest supply shock in 50 years," putting pressure on both developing and developed economies.
Ayhan Kose, the World Bank's Deputy Chief Economist, said, "The global economy is not falling off a cliff, but the slowdown is clear. Many developing countries have fewer resources to deal with this shock and are less able to withstand it."
This latest forecast is more pessimistic than the World Bank's outlook from January of this year. At that time, the World Bank believed the global economy could largely weather the era of trade uncertainty caused by US President Trump's tariff policies.
World Bank experts have downgraded growth forecasts for about two-thirds of the world's countries, with particularly sharp downward revisions for Turkey, Bangladesh, and South Africa.
Countries adjacent to the Persian Gulf war zone are expected to be hit hardest. Kose stated that Kuwait, Iraq, and Qatar could see near-zero economic growth in 2026, and the United Arab Emirates is expected to have economic growth of only 2.4% this year, less than half the rate projected before the war began.
In its latest "Global Economic Prospects" (GEPs) report, the World Bank stated that the 2020s are almost certain to become a "lost decade" for dozens of developing countries. These countries have made no progress in narrowing the income gap with advanced economies, face long-term economic stagnation, and remain unable to catch up with the living standards of wealthy nations. (Editor: Chen Yiwei) 1150612
FAQ
What is the World Bank's latest global economic growth forecast?
The World Bank forecasts global economic growth of 2.5% in 2025, the slowest since 2020.
What is the main cause of the slowdown?
The US-Israeli war against Iran. The near-closure of the Strait of Hormuz is driving up costs for oil, gas, and fertilizers.
Which regions are most affected?
Countries in the Persian Gulf region. Kuwait, Iraq, and Qatar could see near-zero economic growth in 2026.