World Bank ready to provide up to $100 Billion as middle east conflict threatens Global growth
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.
The lender warned that the ongoing conflict could weaken global economic growth to its lowest level since the COVID-19 pandemic, driven by rising energy prices, persistent inflationary pressures, and tighter global financial conditions.
In its latest Global Economic Prospects report, the World Bank projected global growth would slow to 2.5 percent in 2026, down from 2.9 percent in 2025. The report noted that growth forecasts for nearly two-thirds of economies worldwide have been revised downward since its January assessment.
Although global growth is expected to recover slightly to 2.8 percent in 2027, it will remain below the average growth rates recorded during the 2010s.
To support vulnerable economies, the World Bank said it is making between $50 billion and $60 billion immediately available through existing financing mechanisms, including $25 billion in pre-arranged funding. The resources are intended to strengthen social protection programmes, support government budgets, and provide liquidity for businesses and agricultural producers affected by the crisis.
The institution revealed that more than 30 countries are already working with the World Bank Group to enhance preparedness and facilitate rapid responses under its crisis support framework.
“If the conflict and its economic fallout persist, the World Bank Group can scale up its support to between $80 billion and $100 billion over the next 15 months,” the report stated.
The World Bank also highlighted the severe disruption to global energy markets following the closure of the Strait of Hormuz. As a result, Brent crude oil prices are projected to average $94 per barrel in 2026, representing a 36 percent increase over 2025 levels, assuming the most severe supply disruptions ease by July.
The report further warned that higher fertiliser costs are likely to fuel food inflation, pushing global inflation to an estimated four percent this year, up from 3.3 percent in 2025.
World Bank Group President, Ajay Banga, said developing countries have faced multiple economic shocks over the past decade and require support to protect livelihoods while maintaining long-term growth prospects.
“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.
He added that the World Bank is providing immediate liquidity support and stands ready to deploy additional financing, guarantees, and private-sector solutions if economic pressures intensify.
The report cautioned that risks to the global outlook remain substantial. It estimated that a worsening of energy supply disruptions combined with financial market instability could reduce global growth to as low as 1.3 percent in 2026 while pushing inflation up to 4.4 percent.
Growth in developing economies is expected to slow to 3.6 percent in 2026 from 4.4 percent in 2025 before recovering to 4.2 percent in 2027.
Countries in the Gulf region are forecast to experience some of the sharpest economic setbacks, with growth falling from 3.9 percent in 2025 to near zero in 2026. However, the report projects a recovery to around five percent in 2027 and 2028 as trade resumes and reconstruction activities accelerate.
Sub-Saharan Africa is also expected to experience significant economic pressure, particularly through rising food prices and inflation linked to fertiliser shortages and higher input costs.
World Bank Deputy Chief Economist and Director of the Prospects Group, Ayhan Kose, urged governments to use the crisis as an opportunity to strengthen economic resilience.
“The conflict has taken a toll on global activity, but every crisis also brings an opportunity. This moment should be used to strengthen policy frameworks, invest in infrastructure, accelerate business-enabling reforms and mobilise private capital to support job creation at scale,” he said.
The report also drew attention to rising debt burdens across developing countries. Aggregate government debt has increased from less than 40 percent of gross domestic product in 2010 to more than 70 percent today, limiting governments’ ability to respond to economic shocks and invest in critical sectors such as infrastructure, healthcare and education.
The World Bank warned that growing debt vulnerabilities could further constrain development efforts if economic conditions deteriorate further.
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