World Bank Warns of Global Slowdown and Higher Inflation Amid US-Iran Tensions

According to the World Bank, increasing tensions between the United States and Iran could become a cause of further challenges for the world economy. It notes that this year’s global growth could be the weakest since COVID-19.

According to the latest report, the global growth forecast of the World Bank has its lowest from 2.9% to 2.5% for this year. It observed that higher energy prices, rising inflation, and increased borrowing costs are heavily weighing on the global economy.

Also, the reports warned that increasing supply chain disturbances could lead to further decline in global economic conditions. It forecast a 36% rise in Brent crude oil prices, with average levels potentially reaching $94 per barrel.

More cautioned that, global inflation could climb to 4% if the Strait of Hormuz is closed, versus 3.3% last year. As per reports statement, that economic growth projections have already been cut for almost two-thirds of countries since January.

Furthermore, $60 billion has been reserved to help developing countries affected by the Middle East conflict, and the package can be expanded to as much as $100 billion if necessary, according to World Bank statement.