World Bank warns global growth slowing to lowest level since pandemic

The World Bank has issued a stark warning that global economic growth is projected to decelerate to its lowest point since the COVID-19 pandemic, reaching an estimated 2.5% in 2026. This significant slowdown is primarily attributed to escalating geopolitical tensions, particularly the ongoing conflict in the Middle East.

The conflict has driven a sharp increase in energy prices, contributing to higher inflation and elevated borrowing costs across the globe. The institution’s latest report, released on Thursday, also cautioned that if hostilities intensify further and disrupt energy supplies more severely, global growth could plummet to as low as 1.3%.

This revised outlook has led to downgraded growth forecasts for approximately two-thirds of the world's economies, with many developing nations facing the risk of a "lost decade" characterized by weak income growth.