The World Bank has cut its forecast for global economic growth this year, citing the fallout from the Iran war as a major factor. The 189-country anti-poverty agency expects the world economy to grow just 2.5% this year, its weakest performance since the COVID-19 pandemic upended global commerce six years ago.

Impact on the US Economy

The United States, which started the war by joining Israel to attack Iran, is being spared a downgrade. The World Bank still expects the world’s biggest economy to grow 2.2% this year, unchanged from a January forecast and up a tick from 2.1% in 2025. As a major energy producer, the US economy is more resilient than countries that import their oil and natural gas, and the US economy is benefiting from big tax cuts and booming investment in artificial intelligence.

However, ordinary Americans are still frustrated by higher gasoline and other prices. Other economies are getting hit harder, with the World Bank slashing its 2026 growth forecast for developing and emerging market countries by 0.4 percentage points to a post-pandemic low of 3.6%.

Global Economic Implications

China, the world’s No. 2 economy, is expected to register economic growth of 4.2% this year, down from 5% in 2025 and from the 4.4% the bank had forecast for this year back in January. India is once again expected to be the world’s fastest-growing major economy, expanding 6.6% this year; but that’s down sharply from 7.7% in 2025.

The 21 European countries that share the euro currency are collectively expected to eke out 0.8% growth this year, down from 1.4% in 2025. The war has also disrupted trade in fertilizer, much of which is exported through the Persian Gulf, which could lead to food shortages as farmers skimp on fertilizer to avoid higher costs.

Original reporting: KTBS 3 (Shreveport) — read the source article.