OECD: Middle East Conflict Could Slash Global Economic Growth to 2.1 Per Cent

The Organisation for Economic Co-operation and Development (OECD) stated on Wednesday (3/6/2026) that global economic growth in 2026 is expected to slow sharply to 2.1 per cent, down from 3.4 per cent in 2025, should disruptions caused by the Middle East conflict continue into 2027.

In a scenario where disruptions, including those to shipments through the Strait of Hormuz, are only temporary and energy prices begin to ease gradually from mid-2026, the Paris-based organisation estimates that global economic growth will slow to 2.8 per cent. This figure is slightly lower than the 2.9 per cent expansion projection presented by the OECD in March, according to the agency’s latest economic outlook report.

“The development of the conflict in the Middle East remains uncertain, but the economic consequences are likely to be felt for some time even after the conflict ends,” the OECD explained in its latest analysis, which considers two scenarios: short-term disruption and prolonged disruption.

In the more pessimistic scenario, the OECD predicts that global economic growth will slow further to 1.8 per cent by 2027.

“Unemployment will rise and investment, including investment in artificial intelligence (AI) which requires high energy consumption, will weaken significantly, with an increasing risk of price adjustments in financial markets,” the organisation stated.

In its country-specific projections, the OECD only provided estimates based on the short-term disruption scenario.