OECD: Iran war erases global growth upgrade, fans inflation
The OECD has warned that the escalating conflict in the Middle East has knocked the global economy off a stronger growth path, threatening to push inflation sharply higher. Global GDP growth is now projected to ease from 3.3% last year to 2.9% in 2026, with energy price surges and conflict uncertainty offsetting positive trends.
The OECD has downgraded its global growth forecast due to the conflict in the Middle East. Global GDP growth is expected to ease from 3.3% to 2.9% in 2026. The conflict has disrupted energy shipments, causing prices to surge. This surge is projected to push inflation higher, with G20 inflation expected to be 1.2 percentage points higher than previously expected in 2026. The OECD has urged central banks to remain vigilant and called on governments to ensure support measures for households are well-targeted and time-limited. The US, China, and Euro area economies are all expected to be impacted, with growth projections revised downward.
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