The war in the Middle East will have a cascading impact on the global economy, even if a ceasefire announced by U.S. President Donald Trump takes hold, World Bank President Ajay Banga told news agency Reuters in an interview on Friday.
And the damage will be far deeper if the ceasefire fails and the conflict escalates, he said.
Banga on Tuesday said global growth could be lowered by 0.3 to 0.4 percentage point in a baseline scenario, with an early end to the war, and by as much as 1 percentage point if it endures. Inflation could increase by 200 to 300 basis points, with a much higher impact – of up to 0.9 percentage point – if the war continues, he said.
The World Bank’s baseline estimate now projects growth in emerging markets and developing economies of 3.65 per cent in 2026, compared to 4 per cent in October, dropping as low as 2.6 per cent in an adverse scenario with a…
