OECD: The Iran war erases global economic expectations and ignites inflation in 2026
The Organization for Economic Co-operation and Development (OECD) warned on Thursday that the escalation of conflict in the Middle East has derailed the global economy from its path toward strong growth, as it threatens the near-total halt of energy shipments via Energy prices and the unpredictable nature of the conflict, undermining the positive factors resulting from strong investments in the technology sector, low tariff rates, and momentum extending from 2025.
Major Economy Outlook
The organization expects headline inflation in the United States to reach 4.2% in 2026, an increase of 1.2 percentage points from the previous forecast.
In China, growth is expected to slow to 4.4% in 2026 and 4.3% in 2027, both in line with previous OECD forecasts.
In the European Union, euro area GDP growth is expected to decline to 0.8% in 2026, as higher energy prices negatively impact economic activity, before rising to 1.2% in 2027 supported by increased defense spending.
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