OECD warns of global slowdown as U.S.-Iran war stymies economic growth prospects

Key points

• The Organisation for Economic Cooperation and Development has slashed its global growth outlook, warning that the economic damage from the U.S.-Iran war could dramatically worsen unless a durable peace settlement is reached quickly.
• In its June Economic Outlook, the OECD said global growth is now expected to slow from 3.4% in 2025 to 2.8% in 2026, before recovering to 3.1% in 2027 — should the current energy price shock start easing by the middle of this year.
• But that's assuming a time-limited disruption scenario in which a peace agreement is reached and current disruptions to the Strait of Hormuz are swiftly resolved, said Stefano Scarpetta, the OECD's chief economist.
• A worse scenario, in which the disruptions to shipping and energy infrastructure continue well into 2027, would see global growth fall sharply to just 2.1% in 2026, and 1.8% in 2027. That would tip some economies into, or close to, recession,...