Global economic growth to slow to 2.8 pc in 2026 amid Mideast tensions: OECD

PARIS: Global economic growth is projected to slow from 3.4% in 2025 to 2.8% in 2026, before recovering to 3.1% in 2027, according to the latest Economic Outlook released by the Organisation for Economic Co-operation and Development (OECD) on Wednesday.

Even though the world economy entered 2026 stronger than many had anticipated, the conflict in the Middle East has become the dominant force shaping the global economic outlook, the OECD said.

According to the OECD, the evolution of the conflict remains uncertain, while its economic consequences are likely to be felt for some time even after its resolution.

Recognising this uncertainty, the organisation based its analysis on two possible trajectories: a time-limited disruption scenario, in which disruptions remain relatively short-lived, and a prolonged disruption scenario with broader and much more lasting negative consequences.

Under a baseline scenario in which prospects for a peace deal between the United States and Iran gain momentum and energy prices gradually ease from mid-2026 onwards, the OECD projects global economic growth to slow from 3.4% in 2025 to 2.8% in 2026 before recovering to 3.1% in 2027.

By RSS/Xinhua