In response to the conflict, the World Bank (WB) is prepared to immediately provide access to funds totaling up to $50–60 billion through existing instruments, including $25 billion in pre-agreed financing.
“These funds can be used to support social protection systems for the most vulnerable groups, strengthen fiscal capacity, and provide working capital and liquidity to businesses and farms. To date, more than 30 countries are actively engaging with the World Bank Group to enhance preparedness and ensure a swift response to the crisis under this response plan,” the bank said in an official statement.
The Global Economy Is in Decline
According to World Bank forecasts, global economic growth will slow to 2.5% in 2026, down from 2.9% in 2025. Forecasts for two-thirds of the world’s economies have been revised downward from January’s estimates.
Global economic growth is expected to accelerate to 2.8% in 2027, but will remain 0.4 percentage points below the average for the 2010s.
Weak growth in developing economies has slowed progress in narrowing the income gap with developed economies. As noted in the report, by 2028, developing economies—excluding China and India—will collectively have gone through nearly an entire decade without any progress in narrowing the per capita income gap between themselves and developed economies.
“Over the past decade, developing countries have faced a range of challenges,” said Ajay Banga, President of the World Bank Group. “The impact of these challenges varies from country to country, but the guiding principle remains the same: to protect people and maintain stability today without sacrificing future prospects for growth and job creation. In response to the current shock, we are providing liquidity where it is needed right now, and we stand ready to mobilize additional financing, guarantees, and private-sector solutions if pressures intensify. Our role is to help countries stabilize the situation, continue implementing reforms, and emerge from the crisis more resilient and stronger.”
Commodity markets pose a threat to both importers and exporters
According to the report, the closure of the Strait of Hormuz has led to serious disruptions in energy markets, with the average price of Brent crude in 2026 projected to reach $94 per barrel—36% higher than the 2025 level—assuming the most severe disruptions are resolved in the second half of the year.
Fertilizer prices are expected to rise significantly this year, which will have an indirect impact on food prices. Taken together, these factors are fueling global inflation, which is expected to rise substantially this year to 4.0%, up from 3.3% in 2025.
At the same time, downside risks remain significant. If disruptions in energy supplies prove to be more severe than currently anticipated and are accompanied by significant financial stress, global economic growth could slow to as low as 1.3% in 2026, while inflation would rise to 4.4%.
The World Bank forecasts that global commodity prices will rise by 16% in 2026.
The thematic chapters of the report examine the fiscal challenges facing developing economies. About two-thirds of developing economies and nearly 90% of low-income countries are commodity exporters. However, their fiscal positions are generally weaker than those of other developing economies, as their revenues are more volatile and less diversified.
“Five years after a period of favorable commodity prices, a significant portion of the additional revenue is usually found to have been spent rather than set aside in reserves to strengthen fiscal positions. To manage commodity price volatility, policymakers should rely on mechanisms such as well-designed fiscal rules and sovereign wealth funds with clearly defined stabilization functions, as well as improve domestic revenue mobilization and promote greater economic diversification,” according to the bank’s experts.
Debt Dependency Is Rising
Another chapter examines the issue of rising debt levels, which make it difficult for countries to respond to crises and invest in long-term development priorities, while also increasing the cost of borrowing. Since 2010, the aggregate public debt of developing economies has risen from less than 40% of GDP to more than 70% of GDP.
Analysis shows that the higher a country’s existing debt level, the more sharply borrowing costs rise as debt increases further. This effect is particularly pronounced in the most vulnerable countries.
For countries with high debt-to-GDP ratios, reducing the debt burden can yield significant financial benefits, including expanded fiscal space for investments in infrastructure, health care, and education, which will contribute to economic growth and job creation.
“The conflict has had a negative impact on global economic activity, but every crisis also creates new opportunities,” notes Aykhan Kose, Deputy Chief Economist and Director of the World Bank Group’s Forecasting Group. “We must seize this moment to strengthen the foundations of economic policy, invest in infrastructure, accelerate reforms that improve the business environment, and mobilize private capital to create jobs on the necessary scale.”
Different Everywhere
According to the report, South Asia is expected to post the highest growth rates among all regions of the world in 2026, though even it will face a significant slowdown—from 7% in 2025 to 6.3% in 2026.
Growth in sub-Saharan Africa is also slowing, with the greatest pressure coming from inflation, including high food prices due to fertilizer supply shortages and rising fertilizer costs.
Regional performance in Europe and Central Asia will weaken. Economic growth is slowing to 2.1% in 2026 (after 2.6% in 2025 and 4.0% in 2024).
The underlying deterioration in forecasts has affected most of the region’s emerging economies due to geopolitical turmoil, the energy crisis, and trade barriers. Excluding Russia, Turkey, and Ukraine, average growth will stand at 3.1%.
The labor markets of European countries are facing severe demographic pressures. A systematic decline in the labor force has been observed against the backdrop of an aging population in all subregions except Central Asia.
In 2026, Moldova’s economy will face stagnation, with GDP growth expected to be the lowest in the region at 1.9% (according to forecasts by the World Bank and the IMF). In the first quarter of this year, growth amounted to just 0.4%. The situation is exacerbated by domestic tariff reforms and external pressures on logistics and energy resources.
Medium-Term Outlook (2027–2031)
Despite a difficult 2026, the IMF ranks Moldova among the potentially fast-growing economies of Eastern Europe over the next five years. As the country adapts to the EU’s €1.9 billion financial assistance package (Growth Plan) and deepens its integration with the EU, experts expect it to reach the regional average growth rate of 3.5% per year by 2028.
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