World Bank Warns of Worst Supply Shock in 50 Years as Hormuz Closure Drags Global Growth to Pandemic-Era Low
On June 11, 2026, the World Bank released its latest Global Economic Prospects report, downgrading global growth for 2026 to 2.5 percent—the slowest since the onset of the COVID-19 pandemic in 2020—down from 2.9 percent in 2025, citing the closure of the Strait of Hormuz following US-Israeli strikes on Iran in late February as triggering the biggest supply shock in 50 years.
MIDDLE EAST,ECONOMY
Global N Press
6/11/20261 min read
On June 11, 2026, the World Bank released its latest Global Economic Prospects report, downgrading global growth for 2026 to 2.5 percent—the slowest since the onset of the COVID-19 pandemic in 2020—down from 2.9 percent in 2025, citing the closure of the Strait of Hormuz following US-Israeli strikes on Iran in late February as triggering the biggest supply shock in 50 years. Ayhan Kose, the World Bank‘s deputy chief economist, said forecasts for three-quarters of the world’s nations had been revised downward from January, warning that while the global economy was not falling off a cliff, it had downshifted sharply and many developing economies were entering the shock with thinner buffers and fewer shock absorbers. The World Bank projects Brent crude to average roughly $94 per barrel in 2026, $34 above pre-war projections. Industrial metals prices are expected to rise 18 percent from 2025, fertilizer prices 38 percent, and global inflation is expected to reach 4 percent.
Gulf economies directly impacted by the conflict face the steepest declines: the World Bank projects Kuwait‘s economy will contract 6.4 percent, Iraq 8.9 percent, and Qatar 5.7 percent in 2026, with overall Gulf growth falling from 3.9 percent in 2025 to near zero—though Saudi Arabia is expected to achieve 3.1 percent growth by redirecting crude through its East-West pipeline, bypassing the strait. The bank said it could not produce economic forecasts for Iran, Lebanon, or Syria due to exceptionally high uncertainty. In a worst-case scenario involving worsening supply disruptions and acute financial pressures, global growth could drop to just 1.3 percent in 2026, the World Bank warned. In a separate Middle East and North Africa Economic Update released on the same day, the Bank also announced a $50 billion financing pledge to help developing economies weather energy and food shocks.
