World Bank cuts global growth forecast to 2.5% as Middle East conflict triggers energy shock

The World Bank trims global growth to 2.5% for 2026, warning the Middle East conflict has sparked a fresh energy shock that raises prices and slows economies worldwide. The Global Economic Prospects report notes growth slowing from 2.9% in 2025 to 2.5% in 2026, the weakest pace since the pandemic era, with about two-thirds of economies facing weaker prospects. Global commodity prices are forecast to rise 22% in 2026, while Brent crude averages $94 per barrel, up 36% from 2025 and more than 50% above January projections. European natural gas is expected to rise ~30% due to tighter LNG markets, fueling inflationary pressures globally.