Overview
- In new baseline estimates, the World Bank now sees 2026 growth in emerging and developing economies at 3.65% with inflation at 4.9%, reflecting the hit from the conflict.
- IMF Managing Director Kristalina Georgieva said the Iran war will leave permanent damage to global output and signaled forecast downgrades in the fund’s reports next week.
- The war has lifted oil prices by about 50% and disrupted supplies of oil, gas, fertilizer, and helium, with knock‑on damage to tourism and air travel that is already affecting household costs.
- World Bank President Ajay Banga said the bank is discussing use of crisis‑response funds with vulnerable countries, including small‑island states, while urging against broad energy subsidies that strain public finances.
- The outlook hinges on whether a fragile ceasefire leads to safe, steady traffic through the Strait of Hormuz, which Banga and market analysts say is key to easing energy prices and limiting further economic harm.