WB warns Iran war could trigger global inflation and food security crisis

World Bank has expressed deep concern over the economic fallout from the Iran war, warning of rising inflation, job losses and worsening food security across vulnerable regions.

Managing Director Paschal Donohoe said the institution is in active discussions with member countries to assess urgent needs and coordinate responses. He noted that clearer plans for financial assistance, including possible emergency loans, are expected in the coming weeks.

The World Bank has also launched a joint initiative with the International Monetary Fund and the International Energy Agency to better align global aid efforts as the crisis unfolds.

The conflict began after the United States and Israel carried out strikes on Iran on February 28, triggering a wider regional war that has disrupted supply chains and driven energy prices higher.

Donohoe highlighted that countries in Asia and Africa are especially exposed to the crisis due to their dependence on imported energy. Many have already introduced fuel-saving measures to cope with shortages and rising costs.

A major concern is the disruption of the Strait of Hormuz, a critical route through which about one-fifth of the world’s oil and gas supplies and a significant share of fertilizers pass. With the route effectively blocked, energy flows have slowed sharply, pushing prices upward and straining economies.

The impact is expected to go beyond energy. Rising costs are likely to reduce household incomes and business activity, while shortages in fertilizer supplies could threaten agricultural production and food availability.

According to the IMF, low-income countries are particularly at risk, as food accounts for a much larger share of household spending compared to wealthier nations. Many countries in Africa, South Asia and the Middle East are already dealing with limited financial reserves, making them more vulnerable to debt pressures.

Donohoe said the World Bank is prepared to provide both financial support and policy guidance, stressing that the crisis could have wide-ranging effects across entire economies if not addressed quickly.