The World Bank Group has announced plans to provide up to $100 billion in financing support for developing countries over the next 15 months as the escalating Middle East conflict threatens to drag global growth to its weakest level since the COVID-19 pandemic.
In a statement following its latest Global Economic Prospects report, the bank warned that higher energy prices, rising inflation, and increasing borrowing costs are putting severe pressure on vulnerable economies worldwide.
The bank said it is immediately making between $50 billion and $60 billion available through existing financing instruments, including $25 billion in pre-arranged financing. If the conflict and its economic fallout persist, the World Bank Group can scale up its support to between $80 billion and $100 billion over 15 months.
The funding is expected to support social safety nets for vulnerable populations, strengthen fiscal capacity in developing economies, and provide liquidity support for firms and farms facing economic stress.
World Bank Group President Ajay Banga said developing countries are once again facing significant economic challenges after years of repeated global shocks. He noted that the institution is providing liquidity where it is needed now and is ready with additional financing, guarantees, and private-sector solutions if pressures deepen.
The latest World Bank report projected that global growth would slow to 2.5% in 2026 from 2.9% in 2025, with forecasts for two-thirds of economies downgraded since January. Although growth is expected to recover slightly to 2.8% in 2027, the pace would remain below the average recorded during the 2010s.
The World Bank warned that the closure of the Strait of Hormuz has severely disrupted energy markets, pushing Brent crude oil prices to a projected average of $94 per barrel in 2026, representing a 36% increase compared to 2025 levels.
The institution also forecast a sharp increase in fertiliser prices, a development expected to worsen food inflation globally and particularly affect low-income economies that rely heavily on imports. Global inflation is now expected to rise to 4.0% in 2026 from 3.3% in 2025 due to mounting energy and food price pressures.
The report further warned that if energy supply disruptions worsen and trigger broader financial stress, global growth could slow sharply to 1.3% in 2026 while inflation could climb to 4.4%.
Developing economies are expected to see growth slow to 3.6% in 2026 from 4.4% in 2025 before recovering to 4.2% in 2027. Sub-Saharan Africa is also expected to face rising inflationary pressures, especially from higher food prices linked to fertiliser shortages and rising agricultural input costs.
For Nigeria, the Middle East crisis has worsened inflation as higher costs of petrol pushed up the price of food and other essential goods. In April, President Bola Tinubu directed key economic officials to develop measures to mitigate the impact on Nigerians amid rising fuel prices. However, two months after the directive, there has not been a clear implementation of such measures even as Nigerians continue to battle rising costs.
The World Bank relief package could provide Nigeria with additional fiscal space to cushion the economic impact, though specific allocations to individual countries have not yet been detailed. The development is significant for tax and finance professionals, as sustained inflation and slower growth affect corporate earnings, VAT collections, and overall government revenue projections.
