Iran Conflict Erases Global Growth Upgrades Says OECD

The conflict in the Middle East has derailed the global economy from what was expected to be a stronger growth path, according to the latest report from the Organisation for Economic Cooperation and Development (OECD). A near-total halt in energy shipments through the Strait of Hormuz, caused by the war in Iran, now threatens to drive inflation higher and stifle economic momentum worldwide.

Global GDP growth is currently projected to slow from 3.3% last year to 2.9% in 2026, before seeing a minor increase to 3.0% in 2027. The OECD noted that prior to the escalation of the conflict, preliminary data suggested that global growth could have been revised upward by 0.3 percentage points. That potential gain has now been entirely erased by the economic impact of the fighting and surging energy prices.