World Bank Cuts 2026 Global GDP to 2.5%: USD Steady, EUR/USD Under Pressure

The World Bank has revised its 2026 global GDP growth forecast downward to 2.5% from 2.6%, with broad-based cuts across major economies that carry significant implications for forex markets. Emerging market growth was slashed to 3.6% from January's 4.0% projection, while China's GDP outlook was trimmed to 4.2% from 4.4%. The Eurozone forecast was reduced to 0.8% from 0.9%, putting additional pressure on EUR/USD, while the US growth estimate held steady at 2.2%. The most dramatic revision was to Middle East growth, cut sharply to 1.6% from 4.3%, reflecting energy supply disruption risks. Notably, the report warns global growth could decelerate to just 1.3% if energy disruptions intensify. Despite the downgrades, the relatively stable US outlook compared to weaker global forecasts supports the dollar's safe-haven appeal. EUR/USD faces headwinds from the Eurozone's deteriorating growth trajectory, while commodity-linked currencies like AUD and CAD may face pressure from the softer emerging market outlook. Traders should monitor energy market developments closely as a key risk variable.