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Expect “some degree of high inflation and some degree of lower growth” due to the Iran war, World Bank Group President Ajay Banga warned at the Atlantic Council on Tuesday.
Banga spoke before the announcement of a two-week cease-fire in the conflict, in a curtain-raiser conversation ahead of the International Monetary Fund (IMF)-World Bank Spring Meetings. He told the packed audience at Atlantic Council studios that inflation could notch 0.9 percent higher and growth could fall 0.4 percent lower as a result of the Iran war and its impact on shipping and energy.
Banga said that he expects a lot of conversation at the IMF-World Bank Spring meetings to focus on how the Bretton Woods institutions can “help countries mitigate the impact.” He pointed to the World Bank’s Crisis Response Windows, which he explained allow countries to access up to 10 percent of the undisbursed value of their International Development Association projects.
Banga warned that “emerging markets are more stressed” by the economic effects of the Iran war, because “they already start from a more complicated fiscal and debt situation.”
He cautioned countries to “be careful” in responding to the economic crisis, to ensure that “you don’t end up using that moment to increase your fiscal challenges,” for example, by implementing “subsidies you could not afford.” That could “put your country into an even bigger problem downstream,” he said.
“A lot of the countries who are impacted by” the economic effects of the war in Iran “don’t control the conflict, but they can control other things,” Banga said. His recommendation: These countries should “focus on policies and reform that they can undertake,” primarily in order to “create jobs.”
Below are more highlights from the conversation, moderated by Atlantic Council President and CEO Frederick Kempe, in which Banga outlined his jobs agenda.
A crisis that “beats” any other
- Banga outlined the three “pillars” of the World Bank’s approach to supporting job growth: 1) building infrastructure to help people access opportunities, 2) strengthening governance, and 3) mobilizing “catalytic capital” to encourage entrepreneurship and, therefore, demand for labor.
- Banga stressed the importance of governments implementing reforms that “enable business to work,” pointing to demands from companies of various sizes around permitting, access to capital, and trade predictability.
- “You can still do things the right way in your country to ensure that businesses . . . survive and create jobs and thrive in your own economy,” Banga said.
- Banga pointed out that 1.2 billion people will surpass the age of eighteen within the next fifteen years, with a notable surge in Africa, making for a global economic opportunity. “What Asia did for the world’s economy in the last thirty years could be what Africa does for the world’s economy in the coming thirty and forty years,” he explained.
- With the urgency of creating more jobs, he explained that the World Bank is focusing on the high-potential fields of infrastructure, agriculture, primary healthcare, value-added manufacturing (including creative industries), and tourism. These sectors, he explained, are “not reliant on outsourcing jobs from the developed world into the developing world,” meaning that they’re not zero-sum for the global job market: they’re additive.
- “This jobs crisis, to me, beats any other crisis that I can see in the near future or in the next twenty years,” Banga said. “Imagine the impact on illegal migration and refugees if 800 million people out of 1.2 billion are not able to get hope and dignity where they are.”
Crises abound beyond Iran
- Banga argued that today’s economic crisis isn’t only related to what is unfolding in Iran. “There is more in the world. There is Ukraine. There’s the issue in Gaza,” he said.
- Banga said that he decided to join the Board of Peace, a multinational group led by US President Donald Trump overseeing reconstruction in Gaza, “in line with” a United Nations Security Council resolution that had urged the World Bank to help rebuild the Gaza Strip.
- He also said that the World Bank had created a Palestinian expert group two years ago with representatives from across the Middle East as well as the United States and Europe. He explained that the group is working on the “clearing of the land” and on investing in “human capital,” among other goals.
- Banga also talked about the climate crisis, arguing that it is “really important to embed” climate-change adaptation and mitigation in development projects. “So when you build a school, build it to be hurricane resistant. When you build a road, build it to be monsoon resistant,” he explained.
Katherine Golden is an associate director of editorial at the Atlantic Council.
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The World Bank Group’s Ajay Banga: Expect higher inflation, lower growth from this global crisis
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Banga dropped by Atlantic Council headquarters for his curtain-raiser speech before the 2026 IMF-World Bank Spring Meetings, where he talked about his jobs agenda and the fast-changing global economy.
Image: World Bank President Ajay Banga addresses an Atlantic Council forum to discuss the bank's ''jobs agenda'' and ''global development'' in Washington, United States, on April 7, 2026. Photo by Lenin Nolly/NurPhoto via Reuters.