OECD warns of global slowdown as U.S.-Iran war stymies economic growth prospects
The OECD said prolonged disruptions could cut global growth to 2.1% in 2026 and 1.8% in 2027 while lifting inflation and unemployment.
- The OECD released its June Economic Outlook on Wednesday, projecting global growth will slow from 3.4% in 2025 to 2.8% in 2026, before recovering to 3.1% in 2027 if energy shocks ease.
- Disruptions at the Strait of Hormuz and damage to Gulf energy infrastructure have sent energy prices soaring and raised costs for fertilizers and other industrial inputs, as the OECD warned the conflict involving Iran will have lingering consequences.
- In a prolonged disruption scenario through 2027, global growth could fall to 2.1% in 2026 and 1.8% in 2027, potentially tipping economies toward recession, while inflation would rise by 0.4 percentage points in 2026 and 1.3 percentage points in 2027.
- Stefano Scarpetta, OECD chief economist, warned that Unemployment could rise and investment would weaken significantly, noting the consequences would prove especially severe for developing economies with limited energy reserves and fragile currencies.
- The OECD highlights the vulnerability of global economies to single chokepoints, urging emergency demand-restraint measures and international coordination of strategic energy stocks to mitigate supply crunch effects and strengthen energy resilience.
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The crisis unleashed by U.S. and Israeli attacks on Iran has become a determining factor in global economic prospects, causing an energy problem that is intensifying inflationary pressures, warned the Organisation for Economic Cooperation and Development (OECD).
The OECD’s Worst-Case Scenario for the Iran War Ends in a Recession Rivaling 2008 — and the Ceasefire Is Already Breaking Down
Summary and Key Points – For years, the economists’ watchlist was the same: AI, debt, trade, and demographics. The OECD just rewrote it. Its new assessment names the single biggest force now shaping the global economy as the war in the Middle East — and lays out two starkly different futures depending on how long the Strait of Hormuz stays contested. One is bumpy but survivable. The other is somewhere economists dread: a stagflationary spiral in…
Prolonged energy disruption from Iran war would be severe blow to global economy: Research
A new economic outlook released Wednesday indicates that a prolonged disruption of energy supplies resulting from the war in Iran would deliver a severe blow to the global economy, likely causing countries to slip into recession and leading to increased unemployment. The Organization for Economic Cooperation and Development (OECD) described the conflict's impact as the...
The war in the Middle East will lead to lower growth and higher inflation in the world in 2026, due to its effects on energy and fertilizer prices, Economic Cooperation and Development (OECD) said on Wednesday. In its latest report, the OECD, based in Paris, reduces its March projections, but establishes two hypotheses given the "incident" evolution of the conflict and its effects. Growth will go from 3.4 percent in 2025 to 2.8 percent of GDP in…
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