What is the World Bank's baseline forecast for global energy price increases in 2026, and what key assumption underpins that projection?

The World Bank forecasts a 24% surge in energy prices in 2026—the highest level since Russia’s full-scale invasion of Ukraine—under its baseline scenario, which assumes the most acute disruptions from the Middle East war end in May and shipping volumes through the Strait of Hormuz gradually return to near pre-war levels by October.

How does the World Bank link rising energy prices to broader economic impacts, particularly for developing economies?

The World Bank states that the war is hitting the global economy in cumulative waves: first through higher energy prices, then higher food prices, and finally higher inflation—which pushes up interest rates and makes debt more expensive; as a result, developing economies are projected to see inflation rise to 5.1% in 2026 (up from 4.7% in 2025) and growth fall to 3.6% (down from a pre-war forecast of 4%), with the poorest and highly indebted countries hit hardest.

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