The World Bank expects the weakest global economic growth since the start of the coronavirus pandemic this year, thanks to the ramifications of the Iran war.
The institute has revised its forecast for 2026 downward by 0.1 percentage point to 2.5 per cent, according to a report published by the World Bank.
Last year, the global economy grew by 2.9 per cent.
The reasons for the downward revision are high inflation and rising energy prices, after shipping in the Strait of Hormuz virtually ground to a halt as a result of the conflict.
Whilst motorists in wealthier countries are annoyed by higher petrol prices, the world’s poorest are being hit particularly hard, according to the Washington DC-based institute.
For economically weak countries, this means that by the end of 2026, a quarter of developing countries will be poorer than in 2019; among low-income countries, the figure is likely to be a third.
According to World Bank projections, about half of fragile and conflict-affected countries will have less money by the end of the year than they did in the year before the start of the coronavirus pandemic.
At the same time, the World Bank is taking action.
Shortly after the crisis began, it made between $US20 billion and $US25 billion ($A29 billion and $A36 billion) in emergency aid available.
The development bank announced that it would make between $US50 billion and $US60 billion available to assist governments in developing countries and support agricultural businesses.
Should the crisis persist, the bank said it is prepared to roughly double that figure over a 15-month period.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
