The World Bank lowers its global economic growth forecast for 2026

New York, June 11 (Xinhua) -- The World Bank released its latest Global Economic Outlook report on June 11, lowering its forecast for global economic growth in 2026 from 2.6% in January to 2.5%, and warning of potential further downside risks.

The report states that the global economy is facing a significant impact, and the Iran conflict has led to a significant increase in energy prices, bringing new inflationary pressures and strengthening expectations of tightening monetary policy. As the growth prospects of economies that rely on energy imports and are directly affected by conflict weaken, global economic growth this year will be lower than 2.9% in 2025, slowing to the lowest level since the COVID-19 epidemic.

The report warns that if energy supply disruptions become more severe than expected and are accompanied by financial market risks, global economic growth may even slow down to 1.3% this year. Continued uncertainty in trade policies and geopolitical pressures also pose substantial risks. However, larger investments in artificial intelligence and its applications may enhance the level of economic activity.

The report also stated that the introduction of relevant policy measures is crucial to address current challenges, and it is necessary to enhance global cooperation to ensure energy and food supply security, support the trading system, and promote energy transformation. Decision makers need to strike a balance between controlling inflation and supporting economic activity, enhancing fiscal sustainability, and maintaining financial stability.