World Bank has maintained its forecast for Nigeria’s economic growth at 4.1 per cent in 2026 and 4.2 per cent in 2027, despite mounting concerns over global economic uncertainty triggered by renewed conflict in the Middle East.
Gatekeepers News reports that the projection was contained in the bank’s 2026 Global Economic Prospects report released on Thursday.
While keeping its outlook for Nigeria unchanged, the Washington-based lender warned that escalating geopolitical tensions and rising energy prices are creating fresh challenges for the global economy.
According to the report, the conflict in the Middle East has sparked a new economic shock by driving up energy costs, reviving inflationary pressures and dampening growth prospects across emerging and developing economies.
“The global economy is facing another major shock,” the report stated.
“The conflict in the Middle East has triggered sharp increases in energy prices, renewed inflationary pressures, and fueled expectations of tighter monetary policy.”
The World Bank projects global economic growth to slow to 2.5 per cent in 2026 from 2.9 per cent in 2025, citing weaker prospects for countries dependent on energy imports and economies directly affected by the conflict.
However, the institution expects global activity to strengthen from 2027 as energy supplies stabilise, monetary easing resumes and global trade conditions improve.
The report also forecasts growth in emerging market and developing economies (EMDEs) to moderate to 3.6 per cent this year, with per capita income growth expected to weaken further in 2026.
According to the bank, per capita incomes in developing economies, excluding China and India, are unlikely to return to pre-pandemic levels before 2028, indicating a prolonged period of slower income convergence with advanced economies.
The World Bank cautioned that risks to the global outlook remain heavily tilted to the downside.
“A renewed escalation of hostilities or more prolonged disruptions to commodity flows could further raise commodity prices, intensify inflationary pressures and food insecurity, trigger financial stress, and lower growth,” the institution warned.
It added that if energy supply disruptions worsen and are accompanied by significant financial instability, global growth could decline sharply to as low as 1.3 per cent in 2026.
The bank urged policymakers around the world to strike a balance between controlling inflation and supporting economic activity while maintaining fiscal sustainability.
The report also highlighted concerns over rising sovereign debt levels across developing economies.
According to the lender, government debt in emerging economies has increased steadily since the global financial crisis, exposing many countries to higher borrowing costs and growing debt-servicing burdens.
“Rising government debt poses a key challenge for EMDEs, as it leads to higher interest rates, higher debt-service payments, and a greater likelihood of debt distress,” the report said.
The World Bank further warned that commodity-exporting countries face additional fiscal risks because of volatile commodity prices, noting that many governments spend revenue windfalls during boom periods instead of saving them for future shocks.
To strengthen economic resilience, the institution recommended improved domestic revenue mobilisation, more efficient public spending, stronger debt management frameworks and enhanced fiscal institutions.
It also advocated the adoption of credible fiscal rules, independent fiscal councils, sovereign wealth funds and diversified revenue sources to reduce economic volatility, support growth and create jobs.
