Growth and disinflation, interrupted:

The reference forecast assumes the war lasts a few more weeks, disruptions fade, and production and exports from the region normalize by mid-2026. It also assumes uncertainty around trade, economic policy, and geopolitics stays elevated through 2027.
Energy commodity prices are projected to rise 19% in 2026 (versus a small decline in the October 2025 WEO), with oil up 21.4%, consistent with an average petroleum spot price index of about US$82 per barrel. Natural gas is expected to be hit harder than oil, and food prices are also projected to rise on higher energy, fertilizer, and transportation costs.
Monetary policy remains divergent across major economies, with the US federal funds rate projected to decline gradually to a terminal rate of about 3.1% by end of 2027; the euro area policy rate expected to increase by 50 basis points during 2026; and Japan’s policy rate projected to rise toward a neutral setting of about 1.5%.
Advanced-economy fiscal policy is projected to be broadly neutral in 2026 and tighten later, even as deficits widen. The US fiscal-balance-to-GDP (gross domestic product) ratio deteriorates by 0.7 percentage point to 7.5% in 2026; Germany’s deficit widens by more than one percentage point to 3.8%; and Japan’s deficit widens by one percentage point of GDP. US public debt rises from 124% of GDP (2025) to 142% (2031), euro area debt from 87% to 90%, and emerging market and developing economy public debt from 74% to 86%.
Projections treat trade policies as they stood at the end of March as permanent. The US effective tariff rate used in the forecast is 13.5% (down from 18.7% in the October 2025 forecast); the rest-of-world effective tariff rate on imports from the US is unchanged at 3.5%.
Before the conflict, the “pre-conflict” bottom-up path implied global growth of 3.4% in 2026 and 3.2% in 2027; under the reference (short-lived war) forecast, global growth slows to 3.1% in 2026 and 3.2% in 2027, and the report supplements this baseline with model-based downside scenarios in case the conflict becomes more prolonged or intense.