OECD: Middle East Conflict Pressures Global Economy, 2026 Inflation Forecast to Rise

JAKARTA, KOMPAS.com - The Organisation for Economic Co-operation and Development (OECD) has warned of increasing pressures on the global economy. The source of this pressure stems from escalating conflicts in the Middle East.

The OECD Economic Outlook Interim Report, March 2026 edition, titled Testing Resilience, highlights disruptions to global energy distribution. The primary risk arises from potential interruptions to shipping routes in the Strait of Hormuz.

“Surges in energy prices and disruptions to commodity supplies will increase business costs and drive up consumer inflation, with negative consequences for growth,” the OECD states in the report, quoted on Monday (30/3/2026).

A slowdown is occurring despite the global economy previously being quite robust. Investments in artificial intelligence (AI) as well as fiscal and financial conditions had previously supported growth.

Rising energy prices are the main factor behind the pressure. Production costs are increasing, and purchasing power is weakening.

The impact extends to global demand. Economic activity is also under pressure.

In terms of prices, inflation in G20 countries is projected to reach 4.0% in 2026. This figure is higher than previous forecasts.

Inflation is expected to fall to 2.7% in 2027. Price pressures are still driven by energy surges that spill over into food and production costs.

The OECD also notes that medium-term inflation expectations are beginning to rise in several major countries. This condition reflects that price pressures have not yet eased.

Financial market volatility is also increasing. Pressure is more pronounced in the Asia region, although global conditions remain relatively loose.

The OECD assesses that central banks need to maintain inflation stability. Monetary policies in various countries are beginning to diverge.

Some countries are maintaining high interest rates. Others are starting to consider easing.