Global growth forecast lowered amid Iran war fallout

Monday, June 15, 2026

The World Bank has lowered its 2024 global economic growth forecast to 2.5%, largely due to rising energy prices and uncertainty stemming from the Iran conflict, which has disrupted key oil and fertilizer supply routes. This slowdown impacts nearly two-thirds of countries, particularly developing economies, while the U.S. economy shows relative resilience due to its energy production and fiscal policies.

The World Bank has lowered its global economic growth forecast for 2024, citing the ongoing conflict involving Iran as a key factor behind rising energy prices and increased economic uncertainty. The international development institution now projects the world economy to expand by 2.5% this year, marking the slowest pace since the COVID-19 pandemic disrupted markets six years ago.

The revised outlook reflects a deterioration for nearly two-thirds of the 189 countries monitored by the World Bank, as the conflict’s broader economic repercussions weigh heavily, particularly on energy-importing nations. However, the United States stands out as an exception, with its growth forecast remaining steady at 2.2%—unchanged from January’s estimate and slightly higher than the projected 2.1% growth in 2025. The resilience of the U.S. economy is attributed in part to its status as a major energy producer, ongoing fiscal stimulus measures such as significant tax cuts, and robust investment in artificial intelligence sectors. Despite this, higher gasoline and consumer prices continue to strain ordinary Americans.

The outlook for developing and emerging markets has been notably revised downward, with the World Bank trimming 2026 growth expectations by 0.4 percentage points to 3.6%, the lowest level since the immediate post-pandemic period. These economies are suffering from disrupted energy supplies and escalating fuel costs, which have undermined business and consumer confidence, according to the Bank.

China, the world’s second-largest economy, is forecast to grow by 4.2% in 2024, a decline from the 5% growth anticipated for 2025 and from the 4.4% estimated earlier this year. India is expected to remain the fastest-growing major economy but will also experience a slowdown, with growth forecast at 6.6% for 2024 compared to 7.7% in 2025.

The eurozone’s 21 member countries are projected to record modest growth of 0.8% this year, down from 1.4% in 2025, reflecting ongoing economic headwinds in the region.

The conflict’s immediate trigger was a coordinated attack by the United States and Israel on Iran on February 28, leading Tehran to close the Strait of Hormuz—a critical maritime chokepoint through which approximately 20% of the world’s oil and natural gas shipments pass. This action caused energy prices to surge sharply. The World Bank now anticipates average Brent crude oil prices will reach $94 per barrel in 2024, a 36% rise from levels last year.

Beyond energy, the war has also disrupted fertilizer exports through the Persian Gulf. The resulting supply shortages risk reducing fertilizer application for farmers, potentially leading to lower agricultural yields and food insecurity in vulnerable regions.