NEW YORK, June 11 (Xinhua) -- The World Bank on Thursday lowered its global growth forecast to 2.5 percent for 2026, down from 2.9 percent in 2025, marking the lowest rate since late 2019.
The bank's semi-annual Global Economic Prospects report cited higher energy prices, steeper inflation and increased borrowing costs amid the Middle East conflict for the growth cut.
Downside risks are significant, the report warned. Global growth could further slow to 2.1 percent if the energy disruptions lasted longer and oil prices averaged 115 U.S. dollars per barrel this year, driving inflation to 4.4 percent; or worsen to 1.3 percent if the energy shock affected financial markets.
The report lowered growth forecast for two-thirds of countries compared to its January report this year, with countries in the Gulf taking the biggest cuts from 3.9 percent in 2025 to close to zero in 2026.
South Asia is expected to have the strongest growth of any region at 6.3 percent in 2026, still a slowdown from 7 percent in 2025.
The report maintained its 2.2 percent growth forecast for the U.S. economy in 2026, although it noted that this figure could drop to 2.1 percent in 2027 and 2 percent in 2028.
Economy in the euro area is expected to grow 0.8 percent in 2026, down from 1.4 percent in 2025. Japan's gross domestic product is forecast to grow 0.7 percent in 2026, down from 1.1 percent in 2025.
The report expects global growth to improve to 2.8 percent in 2027, but this will remain 0.4 percentage points below the average in the 2010s.
While risks remain skewed to the downside amid escalating hostilities, further commodity market disruptions and additional geopolitical strains, the bank holds that policy action is critical.
Globally, the World Bank urges concerned countries to safeguard energy and food security and advance the energy transition; domestically, it urges all countries to control inflation, strengthen fiscal sustainability and support job creation. Enditem
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