OECD warns of global slowdown as U.S.-Iran war stymies economic growth prospects
The OECD has revised its global growth forecast downward due to the economic impact of the U.S.-Iran war. If a peace settlement is not reached soon, growth could plummet to 2.1% in 2026 and 1.8% in 2027. The report emphasizes the need for resilience in supply chains and diversification of energy sources to mitigate these risks.
- ▪The OECD has cut its global growth outlook, projecting a decline from 3.4% in 2025 to 2.8% in 2026.
- ▪In a worst-case scenario, global growth could fall to 2.1% in 2026 and 1.8% in 2027 due to ongoing disruptions.
- ▪The report highlights the vulnerability of global economies to chokepoints like the Strait of Hormuz and the urgent need for energy diversification.
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The Organisation for Economic Cooperation and Development has slashed its global growth outlook, warning that the economic damage from the U.S.-Iran war could dramatically worsen unless a durable peace settlement is reached quickly.In its June Economic Outlook, the OECD said global growth is now expected to slow from 3.4% in 2025 to 2.8% in 2026, before recovering to 3.1% in 2027 — should the current energy price shock start easing by the middle of this year.But that's assuming a time-limited disruption scenario in which a peace agreement is reached and current disruptions to the Strait of Hormuz are swiftly resolved, said Stefano Scarpetta, the OECD's chief economist.A worse scenario, in which the disruptions to shipping and energy infrastructure continue well into 2027, would see global…
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