Middle East War Devastates Global Economy, OECD Downgrades 2026 Growth Forecast
The OECD warned that the Middle East war is weakening global economic growth prospects. According to the report, if oil and gas exports from the Persian Gulf region recover in Q3 2026, global growth will be downgraded from 2.9% to 2.8%. If the war drags on, growth could fall to 2.1%.
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- 📰 Published: June 3, 2026 at 17:05
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(Paris, 3rd, Combined Foreign Reports from CNA) The Organisation for Economic Co-operation and Development (OECD) warned today that the Middle East war has weakened global economic growth prospects, and the impact will be more severe if an effective ceasefire agreement cannot be reached by 2027.
According to AFP, the OECD, composed of 38 industrialized countries, stated in its quarterly update report that if oil and natural gas exports from the Persian Gulf region can return to pre-conflict levels in the third quarter, the global economic growth rate for 2026 will be revised down from the original forecast of 2.9% to 2.8%.
However, the OECD pointed out that if the Middle East war continues into next year, global growth could further slow to 2.1%, far below the average annual growth rate of 3.4% between 2013 and 2019 before the COVID-19 pandemic.
OECD Chief Economist Stefano Scarpetta said in the report, "The longer the disruption lasts, the greater the economic and social costs will be."
He emphasized that many countries are at risk of falling into recession, and a decline in investment spending, including in the energy-intensive artificial intelligence (AI) sector, could lead to higher unemployment.
Prolonged high prices for energy, fertilizers, and other major hydrocarbon products from the Persian Gulf region will put particularly severe pressure on developing countries where "energy and food account for a high proportion of household consumption."
Even if the war triggered by the US and Israeli attacks on Iran at the end of February ends within the next few weeks, the OECD still predicts that global inflation will rise to 4.0% this year from 3.4% last year.
Under this "short-term disruption scenario," the OECD predicts the US economy will slow to 2.0% this year after 2.1% last year, and further to 1.8% next year.
For the eurozone, which is highly dependent on energy imports, even if a ceasefire is reached in the Middle East within the next few weeks, its GDP growth rate is still expected to fall from 1.4% last year to 0.8% this year. (Editor: Chang Ming-hsuan) 1150603
According to AFP, the OECD, composed of 38 industrialized countries, stated in its quarterly update report that if oil and natural gas exports from the Persian Gulf region can return to pre-conflict levels in the third quarter, the global economic growth rate for 2026 will be revised down from the original forecast of 2.9% to 2.8%.
However, the OECD pointed out that if the Middle East war continues into next year, global growth could further slow to 2.1%, far below the average annual growth rate of 3.4% between 2013 and 2019 before the COVID-19 pandemic.
OECD Chief Economist Stefano Scarpetta said in the report, "The longer the disruption lasts, the greater the economic and social costs will be."
He emphasized that many countries are at risk of falling into recession, and a decline in investment spending, including in the energy-intensive artificial intelligence (AI) sector, could lead to higher unemployment.
Prolonged high prices for energy, fertilizers, and other major hydrocarbon products from the Persian Gulf region will put particularly severe pressure on developing countries where "energy and food account for a high proportion of household consumption."
Even if the war triggered by the US and Israeli attacks on Iran at the end of February ends within the next few weeks, the OECD still predicts that global inflation will rise to 4.0% this year from 3.4% last year.
Under this "short-term disruption scenario," the OECD predicts the US economy will slow to 2.0% this year after 2.1% last year, and further to 1.8% next year.
For the eurozone, which is highly dependent on energy imports, even if a ceasefire is reached in the Middle East within the next few weeks, its GDP growth rate is still expected to fall from 1.4% last year to 0.8% this year. (Editor: Chang Ming-hsuan) 1150603