WBG Senior VP and Chief Economist Indermit Gill said on 22nd that a renewed
US‑Iran escalation could lift inflation and interest rates and cut global growth
to about 1.3% this year. In its June forecast the WBG modeled three scenarios;
the worst case — conflict lasting six months or longer — is now close to reality
and would push global inflation to roughly 4.5%. Prolonged fighting and damage
to Middle East oil infrastructure would also disrupt shipments of fertilizer,
helium and sulfur, worsening food insecurity. Gill warned that countries still
recovering from COVID could face sharper food stress, while high‑debt countries
may see education, health and other spending squeezed by rising rates; if
inflation accelerates, some high‑debt nations could encounter serious
debt‑servicing problems within months.
