PARIS: The increasing crisis in the Middle East has thrown the global economy off track, the Organisation for Economic Cooperation and Development warned on Thursday, as a near-halt in petroleum shipments through the Strait of Hormuz threatens to drive prices substantially higher.
According to the Paris-based agency, the global economy was on track for faster-than-expected growth before the Iran conflict broke out, but that chance has now all but vanished. Global GDP growth is expected to slow from 3.3 percent in 2025 to 2.9 percent in 2026, with a slight increase to 3 percent in 2027. This is due to rising energy prices and the conflict’s unpredictable nature, which will offset tailwinds from strong technology-related investment, lower effective tariff rates, and momentum from 2025.
Saudi Arabia’s growth prediction for 2026 remains unchanged at 4%, but it has been reduced by 0.3 percentage points to 3.6 percent in 2027. There’s a high degree of confusion around both the duration and severity of the current dispute over the Middle East and that means that this outlook is subject to significant downside risks that could result in lower growth and higher inflation,” said Mathias Cormann, head of the OECD.
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