The World Bank and the International Monetary Fund (IMF) have warned that the economic fallout from the military confrontation between the United States and Iran is extending well beyond the Middle East, raising inflationary pressures and increasing recession risks for developing economies across the Global South.
According to IRAF, the World Bank’s latest assessment indicates that continued hostilities between Washington and Tehran have pushed global economic growth to its weakest level in years, leaving dozens of developing economies vulnerable to a prolonged economic slowdown.
The report says the conflict has already imposed costs exceeding $37 billion on the United States. It adds that the crisis intensified after Iran disrupted shipping through the Strait of Hormuz in response to what it described as U.S. aggression, heightening uncertainty in global energy markets.
Separately, the IMF warned that sustained oil prices at around $100 per barrel could significantly undermine global economic stability and bring worldwide growth closer to recession.
Economic assessments cited in the report indicate that disruptions to energy trade and transport routes through the Persian Gulf are already being felt across the Global South, from New Delhi and Islamabad to Bangkok and Istanbul. Higher transportation costs and rising fuel import bills have fueled a new wave of inflation in many developing economies.
International media have also highlighted the broader economic consequences of the conflict. The Wall Street Journal, citing Pentagon estimates, reported that U.S. operational costs have surpassed $37 billion, underscoring the absence of a low-cost exit strategy for Washington.
Meanwhile, Axios, quoting senior energy experts, reported that disruptions in the Strait of Hormuz have had the greatest impact on emerging Asian economies. Foreign Policy also argued that Iran’s strategy of linking security in the Persian Gulf to stability in global energy markets has challenged the effectiveness of Western sanctions and military pressure.
The warnings from the World Bank and the IMF underscore growing concerns that prolonged instability in the Gulf could evolve from a regional security crisis into a broader economic challenge, with developing nations expected to bear the heaviest burden.
