Middle East war weighs on the global economy

Symbolic image: Frankfurt Stock Exchange · Photo: Ank Kumar, CC BY-SA 4.0, via Wikimedia Commons

⏱ 2 min · Business & Money · 2 August 2026

The war in the Middle East is leaving its mark on the global economy. The World Bank now projects global growth of only around 2.5 percent for 2026 – in part because the conflict is pushing energy prices sharply higher.

The hardest hit are poorer, energy-dependent countries that have to import at high cost. Central banks, meanwhile, face a dilemma: rising energy prices fuel inflation, while the weaker growth would normally argue for lower interest rates.

In context: how tightly geopolitics and the economy are linked is on show today – signs of a possible de-escalation in the Middle East could ease energy prices as quickly as the war drove them up.

Source incl.: World Bank (Global Economic Prospects). Symbolic image, CC BY-SA 4.0.