JAKARTA - The Iran war is projected to slow global economic growth to its lowest level since the COVID-19 pandemic. Meanwhile, the US-Iran back-and-forth can cause further decline.
Based on the World Bank report, global economic growth is estimated at 2.5% this year, down from 2.9% in 2025.
"A renewed escalation of hostilities or a more prolonged disruption of commodity flows could further raise commodity prices, exacerbate inflationary pressures and food insecurity, trigger financial pressures, and slow growth," the World Bank report said, quoted by CNN, Friday, June 12.
"If the energy supply disruption proves to be more severe than expected and accompanied by substantial financial pressure, global growth could fall to only 1.3% in 2026," the World Bank report continued.
Oil, gas and fertilizer prices have soared as shipments through the Strait of Hormuz remain blocked.
"Due to the Iran war, growth for all emerging economies is expected to be weaker than in 2025. Per capita income in all emerging countries except China and India is not expected to return to pre-pandemic levels until after 2028," he said.
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