Even if Oil Prices Peak Soon, the Global Economy Will Slow This Year
The New York Times • • general
Key Points:
- The Middle East conflict is disrupting global supplies of energy and critical commodities like fertilizer, leading the OECD to forecast slower economic growth and higher inflation through 2027.
- The global economy’s growth is projected to slow to 2.8% in 2026 from 3.4% in 2025, before recovering to 3.1% in 2027, assuming energy prices peak and then decline as Persian Gulf production and trade routes normalize.
- Inflation in the G20 economies is expected to average 4% in 2026 and 3.1% in 2027, higher than previous OECD forecasts due to ongoing uncertainties from the conflict.
- The closure of the Strait of Hormuz has significantly impacted energy shipments, and additional supply disruptions in fertilizer and helium markets pose further risks to global economic stability.
- OECD emphasizes that the economic consequences of the Middle East conflict will likely persist even after the conflict is resolved, reflecting ongoing uncertainties in energy and commodity markets.