Growth forecast revised lower
The World Bank expects the weakest global economic growth since the start of the coronavirus pandemic this year, due to the ramifications of the Iran war.
The institute revised its forecast for 2026 downward by 0.1 percentage point to 2.5 per cent, according to a report published by the World Bank.
Last year, the global economy grew by 2.9 per cent.
The reasons for the downward revision are high inflation and rising energy prices, after shipping in the Strait of Hormuz virtually ground to a halt as a result of the conflict.
Developing economies hit hardest
While motorists in wealthier countries are being affected by higher petrol prices, the world's poorest are being hit particularly hard, according to the Washington DC-based institute.
For economically weaker countries, this means that by the end of 2026, a quarter of developing countries will be poorer than in 2019. Among low-income countries, the figure is expected to be a third.
According to World Bank projections, about half of fragile and conflict-affected countries will have less money by the end of the year than they did in the year before the start of the coronavirus pandemic.
Emergency support expanded
Shortly after the conflict began, the World Bank made between US$20 billion and US$25 billion in emergency aid available.
The development bank said it would make between US$50 billion and US$60 billion available to assist governments in developing countries and support agricultural businesses.
Should the crisis persist, the bank said it is prepared to roughly double that figure over a 15-month period.
