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The Bank also expects the economy to grow more than previously forecast this year, although uncertainties remain because of the Iran war.
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;Resize=(620)) A Russian ballistic missile and drone barrage across Ukraine overnight into Thursday killed at least eight civilians, including children, and wounded more than 50 others, officials said.
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The U.S. economy grew at an annualized rate of 1.5% in the second quarter.
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Disruption to global supplies of oil and liquid natural gas through the Strait of Hormuz has pushed up prices.
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Iran-aligned militias in Iraq were under growing pressure to disarm, but the latest strikes may embolden them to get more deeply involved in the war.
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Price pressures eased during a brief reprieve in the war with Iran, but the resumption of fighting suggests that inflation risks are still prevalent.
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The kingdom faces a choice of whether to keep hitting back as a deterrent or to try to de-escalate the situation.
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The Iran war set off resurgent inflation amid on-again, off-again fighting.
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Once again, the United States and Iran are exchanging direct fire in the Middle East, raising the stakes for the region.
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