The World Bank has announced plans to mobilise up to $100 billion in financial support over the next 15 months to help developing countries manage the economic fallout from escalating tensions in the Middle East, warning that the crisis could significantly weaken global growth prospects.
In its latest Global Economic Prospects Report, the international lender projected that global economic growth would slow to 2.5 percent in 2026 from 2.9 percent in 2025, marking the weakest expansion since the COVID-19 pandemic.
The report noted that rising energy prices, persistent inflation and tighter financial conditions are increasingly weighing on economic activity worldwide, with nearly two-thirds of economies experiencing downward growth revisions since the World Bank’s January forecast.
To help countries navigate the emerging challenges, the World Bank said it is immediately making between $50 billion and $60 billion available through existing financing instruments, including $25 billion in pre-arranged funding.
According to the institution, the resources will be used to strengthen social protection programmes, support government budgets and provide liquidity to businesses and agricultural producers affected by the crisis.
The lender indicated that more than 30 countries are already working with the World Bank Group to improve preparedness and ensure rapid access to emergency support.
“If the conflict and its economic fallout persist, the World Bank Group can scale up its support to $80-100 billion over 15 months,” the report stated.
The warning comes as global energy markets face increasing uncertainty following disruptions linked to the closure of the Strait of Hormuz, a key shipping route for global oil supplies.
The World Bank forecasts that Brent crude oil prices could average $94 per barrel in 2026, approximately 36 percent higher than the average price recorded in 2025, assuming supply disruptions begin easing by July.
Higher energy prices are expected to ripple through the global economy, increasing production and transportation costs for businesses while placing additional pressure on household spending.
The report also highlighted concerns about rising fertiliser prices, which are likely to drive up food production costs and contribute to higher food inflation across developing economies.
As a result, global inflation is projected to rise to four percent in 2026, compared with 3.3 percent in 2025.
World Bank Group President Ajay Banga said governments must focus on protecting vulnerable populations while preserving economic stability and long-term growth opportunities.
“Developing countries have faced a series of challenges over the last decade. The impact differs by country, but the basic test is the same: protect people and preserve stability today, without giving up on growth and jobs tomorrow,” he said.
Mr. Banga noted that the World Bank stands ready to provide additional financing, guarantees and private-sector solutions should economic pressures intensify.
The report warned that downside risks remain substantial. If energy supply disruptions worsen and trigger financial market instability, global growth could slow further to just 1.3 percent in 2026, while inflation could climb to 4.4 percent.
Developing economies are expected to experience some of the sharpest effects. Growth across these markets is forecast to slow from 4.4 percent in 2025 to 3.6 percent in 2026 before recovering to 4.2 percent in 2027.
Sub-Saharan Africa is also expected to face mounting challenges, particularly through higher inflation, rising food prices and increased fertiliser costs, which could place additional strain on businesses, farmers and consumers.
The World Bank’s Deputy Chief Economist and Director of the Prospects Group, Ayhan Kose, said the crisis should serve as a catalyst for economic reforms aimed at improving resilience and boosting private-sector investment.
He urged governments to strengthen policy frameworks, invest in infrastructure, accelerate business-friendly reforms and attract private capital to support job creation and sustainable growth.
The report further highlighted growing fiscal pressures across developing countries, noting that average government debt levels have increased from below 40 percent of GDP in 2010 to more than 70 percent today.
It warned that rising debt burdens are reducing governments’ ability to respond to economic shocks and finance critical investments in infrastructure, healthcare and education, potentially limiting long-term growth prospects.
