The World Bank Group has announced plans to provide up to $100 billion in financing support to developing countries over the next 15 months as the escalating Middle East conflict increases risks to global economic growth.
The funding package follows the bank’s latest Global Economic Prospects report, which warned that rising energy prices, accelerating inflation, and higher borrowing costs are placing significant pressure on developing economies already grappling with multiple economic challenges.
According to the World Bank, between $50 billion and $60 billion will be made available immediately through existing financing instruments, including $25 billion in pre-arranged financing. The institution said the resources will help governments strengthen social safety programmes, support public finances, and provide liquidity for businesses and agricultural enterprises facing economic strain.
The bank noted that more than 30 countries are already working with it to improve crisis preparedness and ensure rapid response mechanisms are in place should economic conditions deteriorate further.
It added that if the conflict and its economic consequences persist, total support could be expanded to between $80 billion and $100 billion over the next 15 months.
World Bank Group President, Ajay Banga, said developing countries are once again facing significant economic headwinds after years of global disruptions.
He explained that while the impact of the current crisis differs across countries, governments face a common challenge of protecting citizens and maintaining economic stability without sacrificing long-term growth and job creation.
According to Banga, the World Bank is providing liquidity support where it is urgently needed and stands ready to deploy additional financing, guarantees, and private-sector solutions if economic pressures deepen.
The latest projections from the bank indicate that global growth will slow to 2.5 per cent in 2026, down from 2.9 per cent in 2025, with growth forecasts downgraded for nearly two-thirds of economies since the start of the year.
Although global growth is expected to improve slightly to 2.8 per cent in 2027, the pace would remain below the average levels recorded during the previous decade.
A major concern highlighted in the report is the disruption to global energy markets following the closure of the Strait of Hormuz. The World Bank projects that Brent crude oil prices will average $94 per barrel in 2026, representing a 36 per cent increase compared to 2025.
The institution also warned of rising fertiliser prices, a development expected to drive food inflation higher and place additional pressure on countries that depend heavily on imported agricultural inputs.
As a result, global inflation is projected to rise to 4.0 per cent in 2026 from 3.3 per cent in 2025.
The report cautioned that risks remain tilted to the downside. If energy supply disruptions intensify and trigger broader financial market stress, global growth could fall sharply to 1.3 per cent in 2026 while inflation could rise further to 4.4 per cent.
Developing economies are expected to experience slower growth, with expansion projected at 3.6 per cent in 2026, down from 4.4 per cent in 2025, before recovering to 4.2 per cent in 2027.
For Sub-Saharan Africa, growth is forecast to ease to 4.0 per cent in 2026 before improving to 4.4 per cent in 2027. The region is also expected to face increasing inflationary pressures driven by higher food prices, fertiliser shortages, and rising agricultural production costs.
For MSMEs across Africa, the outlook presents both challenges and risks. Higher energy and transport costs could increase operating expenses, while rising food prices may reduce consumer spending power. At the same time, businesses dependent on imported raw materials, fertilisers, or fuel are likely to face additional cost pressures, potentially affecting profitability and expansion plans.
In Nigeria, the Middle East conflict has contributed to rising fuel costs and inflation, increasing the prices of food and other essential goods. Earlier this year, Bola Tinubu directed economic officials to develop measures aimed at cushioning the impact on citizens. However, many households and businesses continue to grapple with elevated living and operating costs as inflationary pressures persist
