World Bank Warns US-Iran War Could Cut Growth to 1.3%
Why in the news
The World Bank cautioned that a long conflict between the United States and Iran could badly dent the world economy this year.
Key facts
- Source report: Global Economic Prospects (GEP), June 2026.
- Growth in 2025: 2.9%.
- Worst case: serious energy-supply shocks plus turbulent financial markets persisting for half a year or more.
| Scenario | Global growth 2026 | Global inflation |
|---|---|---|
| Baseline, disruptions ease | 2.5% | About 4.0% |
| Worst case, prolonged war | 1.3% | About 4.5% |
Significance
- War-linked energy and market shocks can pull growth down sharply and push prices up.
Exam angle
- Report: Global Economic Prospects, published by the World Bank.
- Growth figures to remember: 2.9% (2025), 2.5% baseline and 1.3% worst case for 2026.
- Inflation figures: about 4.0% baseline and 4.5% worst case.