World Bank: ME conflict cuts global growth to 2.5% in 2026, oil to $94/barrel, inflation to 4.0%

The World Bank reports Middle East conflict slowing global growth to 2.5% in 2026 (from 2.9% in 2025), with Brent crude oil projected at $94/barrel—36% above 2025 levels—and inflation rising to 4.0% in coming months from 3.3% last year. Fertilizer prices are forecast to skyrocket, threatening food costs globally. Two-thirds of economies face downgrades versus January 2026 projections.

For Nigeria, as a major oil exporter, higher oil prices could boost naira earnings but also increase imported inflation via refined products and fertilizer costs. The Bank warns that if energy cuts worsen, global growth could fall to 1.3% with inflation at 4.4%. Developing economies excluding China/India may see nearly a decade of stalled income gap closure with advanced economies by 2028.

The World Bank is mobilizing $50–60 billion through existing instruments, including $25 billion pre-arranged for vulnerable groups, fiscal capacity, and firm/farm liquidity. President Ajay Banga emphasizes liquidity provision and private-sector solutions if pressures deepen, while Deputy Chief Economist Ayhan Kose urges strengthening policy frameworks, infrastructure investment, and business-enabling reforms to scale job creation.

Will Nigeria’s oil windfall translate to stable forex and lower pump prices, or will rising fertilizer and food costs offset gains—requiring urgent local agricultural investment and subsidy reforms to protect households?

SOURCE: https://dailypost.ng/2026/06/12/middle-east-conflict-slows-global-growth-in-2026-world-bank/