World Bank warns of global economic shock
The World Bank warns that global energy prices will surge by 24 percent this year. This marks the highest peak since Russia's 2022 invasion of Ukraine. The baseline forecast depends on Middle East supply disruptions easing by May.
Oil supply and price shocks
If regional hostilities escalate, commodity markets face a severe and prolonged paralysis. The World Bank notes that attacks on energy infrastructure and transit disruptions in the Strait of Hormuz have already triggered an unprecedented oil supply shock. Overall commodity prices are projected to rise by 16 percent in 2026.
Consequently, the global benchmark Brent crude is projected to average €80 per barrel this year, up from last year’s €64. In a worst-case scenario with slow export recovery, prices could breach EUR 107 per barrel.
Inflation and food security risks
World Bank Chief Economist Indermit Gill emphasized that the conflict strikes the global economy in compounding waves. Surging energy costs directly inflate food prices, creating persistent inflation. This dynamic inevitably forces central banks to maintain higher interest rates and borrowing costs.
Developing nations will bear the brunt of this macroeconomic shock. Fertilizer prices are expected to jump 31 percent in 2026, largely driven by a 60 percent spike in urea costs. This threatens future crop yields and deepens global food insecurity.
Economic growth downgraded
Inflation in advanced economies is projected to average 5.1 percent in 2026, up from 4.7 percent last year. If geopolitical conflicts extend, developing nations will see their inflation rates hit 5.8 percent.
Global economic growth will inevitably slow under these pressures. Developing economies are now expected to grow by only 3.6 percent in 2026, downgraded from a previous 4 percent estimate.
Translation by Iurie Tataru
