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🇩🇿 Algeria /Economy & Trade

World Bank: Global Growth Slowdown Expected Amidst Middle East Conflict and Inflation

From El Watan · () French

Translated from French, summarized and contextualized by DistantNews.

At a glance

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  • Global economic growth is projected to hit its lowest point since the COVID-19 pandemic, according to the World Bank.
  • The conflict in the Middle East, rising energy prices, and increased borrowing costs are cited as major factors contributing to the slowdown.
  • The World Bank forecasts global growth to slow to 2.5% in 2026, with developing economies particularly affected by years of shocks.

Global economic growth is set to reach its slowest pace since the onset of the COVID-19 pandemic, largely driven by the conflict in the Middle East, escalating energy prices, and rising borrowing costs. The World Bank's latest Global Economic Prospects report indicates a significant slowdown, projecting global growth to decelerate to 2.5% in 2026, down from an estimated 2.9% in 2025.

Global growth is expected to slow to 2.5% in 2026, against 2.9% in 2025.

— World BankThe report outlines the projected slowdown in global economic growth for the coming years.

The report reveals that forecasts have been revised downward for two-thirds of the world's economies compared to January's projections. While growth is expected to rebound to 2.8% in 2027, it will remain below the average rate seen in the 2010s. The World Bank highlights that several years of sluggish growth have halted the catch-up process for developing economies relative to advanced economies. By 2028, developing nations, excluding China and India, will have spent nearly a decade failing to reduce their per capita income gap with wealthier nations.

For two-thirds of the world's economies, the forecasts have been revised downwards compared to those established in January of this year.

— World BankThe report indicates widespread downward revisions to economic growth expectations.

World Bank President Ajay Banga acknowledged that while developing countries face a succession of shocks, the impact varies. The overarching challenge remains protecting populations and maintaining stability today without compromising future growth and employment. In response, the bank is prepared to provide liquidity where needed. The report also anticipates a significant increase in oil prices, with Brent crude averaging $94 per barrel in 2026, and fertilizer prices are expected to rise sharply, impacting food costs. This confluence of pressures is projected to push global inflation to 4.0% this year, up from 3.3% in 2025. The bank has allocated $50 to $60 billion for immediate intervention, with over 30 countries currently working with the World Bank under this plan.

Several years of low growth have put a halt to the catch-up process of developing economies on advanced economies.

— World BankThe report notes the impact of prolonged low growth on the convergence of developing and developed economies.
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Originally published by El Watan in French. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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