World Bank flags growth hit
The World Bank chief warned on April 11 that the Middle East war could shave 0.3–0.4 percentage points off global growth in a baseline scenario and up to one percentage point if the conflict endures. That projection links geopolitical conflict directly to near-term global economic trajectories and trade flows. The warning was reported by The Jakarta Post on April 11, 2026. (thejakartapost.com)
World Bank President Ajay Banga said the Middle East war could cut global growth by 0.3 to 0.4 percentage points even if fighting eases soon. (reuters.com) Banga told Reuters on April 10 that a longer conflict could shave as much as 1 percentage point off world growth. He said the hit would spread through trade, energy, shipping and confidence. (reuters.com) The World Bank’s baseline estimate now puts 2026 growth in emerging markets and developing economies at 3.65%, down from 4% projected in October. In the adverse scenario tied to a longer war, that growth rate falls to 2.6%, according to estimates reviewed by Reuters. (reuters.com) The bank also sees inflation rising. Reuters reported that 2026 inflation in emerging markets and developing economies is now forecast at 4.9%, up from 3%, and could reach 6.7% in the extreme scenario. (reuters.com) The mechanism is straightforward: war disrupts oil and gas supply, pushes up freight and insurance costs, and slows trade through chokepoints. The International Monetary Fund said on March 30 that energy importers, poorer countries and economies with thin reserves are the most exposed. (imf.org) The World Bank said on April 8 that the closure of the Strait of Hormuz and damage to energy and public infrastructure had already disrupted markets, raised financial volatility and weakened the 2026 outlook across the Middle East, North Africa, Afghanistan and Pakistan region. (worldbank.org) That regional update projected growth in the Middle East, North Africa, Afghanistan and Pakistan region at 2.6% in 2026, down from 3.7% in 2025. It said oil exporters were hit by damaged energy facilities and lost export volumes, while oil importers faced higher fuel bills and weaker demand. (worldbank.org) The warning lands as policymakers try to judge whether a ceasefire can hold. Banga told Reuters the damage would be “far deeper” if the truce failed and the conflict escalated again. (reuters.com) The World Bank’s January 2026 Global Economic Prospects report was published before this latest shock. Banga’s new estimates show how quickly a war centered on energy routes can change the world growth outlook within one quarter. (worldbank.org)
