World Bank

The Washington institution cut its global growth forecast by 0.4 percentage points to 2.5 percent, citing surging energy prices, inflation and borrowing costs.

The conflict in the Middle East is set to bring global economic growth to its slowest since the COVID-19 pandemic, the World Bank has warned.

In its latest Global Economic Prospects report, published on Thursday, the Washington-based institution cut its global growth forecast for 2026 to 2.5 percent from the 2.9 percent it had predicted in January, citing surging energy prices, rising inflation and higher borrowing costs.

The report highlights the significant economic costs of the conflict, which is at risk of flaring up again, as the fragile ceasefire between the United States and Iran is tested on both sides.

The analysis warns that the outlook could decline further if supply disruptions worsen. Iran’s closure of the Strait of Hormuz – a vital passageway for oil and gas transit – in response to the hostilities launched by the US and Israel has put huge stress upon global energy and other supply chains.

The World Bank estimates that Brent crude prices — the international oil benchmark — will average $94 a barrel this year, 36 percent above last year’s average. Fertiliser prices are forecast to increase significantly this year, with knock-on effects for food prices.

Overall, the closure of the strategic waterway will help to push global inflation to 4 percent this year, a substantial increase from last year’s rate of 3.3 percent.

However, the World Bank cautions that global growth could plummet to as low as 1.3 percent this year, should energy supply disruptions worsen, with inflation pushing to 4.4 percent.

The World Bank report also cautions that developing countries are on the front line of the potential impact.

In its report, the institution has downgraded its growth forecasts for two-thirds of countries since January. Global growth is expected to improve to 2.8 percent in 2027, but will remain 0.4 percentage points below the average during the 2010s, during which the world economy was recovering from the global financial crisis.

Excluding China and India, the report worries that developing countries have made little progress towards narrowing their per capita income gap with wealthy nations over the past decade.

“Developing countries have faced a series of challenges over the last decade,” said Ajay Banga, president of the World Bank Group. “The impact differs by country, but the basic test is the same: protect people and preserve stability today, without giving up on growth and jobs tomorrow.”

The World Bank is pledging to assist any developing country experiencing the economic fallout of the Middle East conflict. The organisation says it has set aside up to $60bn to help. It added that if the conflict persists, it can increase its support to $100bn.

Caracas, May 19, 2026 (venezuelanalysis.com) – Venezuelan Acting President Delcy Rodríguez held a meeting with a World Bank delegation at Miraflores Palace on Friday.

In a statement, Caracas described the summit as “cordial and constructive,” with both parties “exploring possible collaboration in matters of technical assistance.”

“The Venezuelan government and the World Bank agreed on the need to deepen dialogue and agreed to work together to establish concrete areas for technical collaboration for the benefit of the Venezuelan people,” the communiqué read.

Rodríguez was flanked by Economy Vice President Calixto Ortega and Finance Minister Anabel Pereira. The World Bank delegation was led by Susana Cordeiro Guerra, the US-based organization’s vice president for Latin America and the Caribbean.

The Rodríguez administration recently reestablished ties with both the World Bank and the International Monetary Fund following a seven-year hiatus due to Washington’s non-recognition of Venezuelan authorities. However, relations with the two institutions had been frozen several years prior. Former President Hugo Chávez disengaged Venezuela from the multilateral bodies in 2007, calling them “weapons of US imperialism,” though the country remained a formal member.

Since the January 3 US attacks and kidnapping of President Nicolás Maduro, Caracas has fast-tracked diplomatic rapprochement with the Trump administration, which recognized Rodríguez as Venezuela’s “sole leader” in March. The Venezuelan government has launched a series of pro-business reforms and struck agreements with Western energy and mining corporations.

On May 13, Venezuela’s acting president announced the launch of a debt restructuring process as part of efforts to return the Caribbean nation to global financial markets. Venezuelan authorities plan to present a macroeconomic framework and debt sustainability analysis to stakeholders next month.

Venezuela’s foreign debt is estimated as high as US $170 billion, from a combination of defaulted bonds and loans with accrued interest, as well as international arbitration awards. US financial sanctions from 2017 severely exacerbated Venezuela’s economic crisis and blocked the country from fulfilling its debt obligations.

The acting Rodríguez administration has vowed that the country’s priority is to access $5 billion in IMF Special Drawing Rights and that there are “no plans” to contract IMF loans. Venezuela’s Central Bank President Luis Pérez recently announced that a delegation will head to Washington to meet with IMF officials by the end of May.

Trump billionaire allies move in

Caracas’ opening to Western conglomerates has seen multiple Trump officials visit the country alongside business executives to discuss investment opportunities.

Erebor Bank, backed by far-right tech mogul and close Trump ally Peter Thiel, has reportedly pitched its services to Venezuelan officials to restore the country’s access to the US financial system. According to Bloomberg, Erebor co-founder Jacob Hirshman has made several trips to Caracas in recent weeks and met with Central Bank authorities and private bank executives.

Hirshman reportedly told Venezuelan authorities that he counts on US government support. For its part, Erebor confirmed that it held “preliminary conversations about correspondent banking and related financial services” with Venezuelan counterparts. 

Erebor is a digital-only bank registered in Ohio that received its US banking charter in February.

The lure of lucrative investment prospects has also attracted smaller players such as Yorkville Advisors, a New Jersey-based financial firm with ties to Trump’s family, which plans to raise $200 million for acquiring assets in Venezuela.

The company created a special purpose acquisition company (SPAC) and stated that businesses in Venezuela will require “substantial capital investment […] to capitalize on improving macroeconomic conditions.”

In April, Acting President Rodríguez installed a commission to evaluate the “strategic” value of Venezuelan state assets and their possible privatization. Venezuelan private sector companies have begun raising funds ahead of potential sell-offs.

Caracas’ pro-business overtures have also caught the eye of US billionaire investor Fred Ehrsam. The co-founder of crypto exchange Coinbase has likewise made multiple visits to Venezuela in recent weeks to explore “investments ranging from oil and gas to fintech and digital payments,” according to Bloomberg.

Ehrsam held discussions with Venezuelan government officials and reportedly argued that the present moment was ripe for investment as Venezuelan assets remained “deeply undervalued.”

Edited by Lucas Koerner in Caracas.