OECD warns of Middle East war economic impact

The OECD>>> has warned that the global economic outlook is highly dependent on the duration of the Middle East conflict, particularly the war involving Iran>>>. A prolonged conflict could lead to recession in some countries and significantly higher inflation, with global growth potentially slowing to 2.1% in 2026 and 1.8% in 2027. Asian countries, especially Japan>>>, are expected to be hit hardest due to their reliance on Middle East energy supplies. The OECD>>> forecasts that higher energy prices could add 0.4 to 1.3 percentage points to global inflation, potentially prompting central banks to raise interest rates. In a baseline scenario, global growth is projected to slow from 3.4% in 2025 to 2.8% in 2026. The International Energy Agency>>>, International Monetary Fund>>>, World Bank Group>>>, and World Trade Organization>>> have also expressed concerns about the war's impact on global energy supplies and vulnerable economies.