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OECD warns of global slowdown as U.S.-Iran war stymies economic growth prospects
The OECD said prolonged disruptions could cut global growth to 1.8% in 2027 and lift inflation by 1.3 percentage points.
- 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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Even the OECD has sounded the alarm.
·Budapest, Hungary
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The Organisation for Economic Co-operation and Development (OECD) has warned that global economic growth could slow to levels seen during the COVID-19 pandemic and the global financial crisis if the war with Iran continues.
Coverage Details
Total News Sources56
Leaning Left10Leaning Right11Center19Last UpdatedBias Distribution47% Center
Bias Distribution
- 47% of the sources are Center
47% Center
L 25%
C 47%
R 28%
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