Even if Oil Prices Peak Soon, the Global Economy Will Slow This Year

The conflict in the Middle East, which is significantly disrupting the world’s supply of energy and other critical commodities like fertilizer, will slow economic growth this year and raise inflation through 2027, the Organization for Economic Cooperation and Development said on Wednesday.

The global economy’s growth will slow to 2.8 percent this year from 3.4 percent in 2025, before recovering to 3.1 percent next year, the organization said. Those projections assume energy prices have or will have peaked and then will gradually fall as energy production in the Persian Gulf recovers and air and shipping routes then become fully operational. The war has led to the closing of the Strait of Hormuz, the critical waterway off Iran’s southern coast.

Inflation in the Group of 20 economies, which includes the United States, China and the European Union, would average 4 percent this year and 3.1 percent next year. That’s higher than the organization’s previous forecast for 2027 about two months ago.

“The evolution of the Middle East conflict remains uncertain, but its economic consequences are likely to be felt for some time even after its resolution,” the group said in a report released on Wednesday. The O.E.C.D., based in Paris, is a group of mostly advanced economies, although its projections include countries that aren’t members.

Article source: https://www.nytimes.com/2026/06/03/business/iran-war-oecd-economy.html