OECD: War Drags Growth
The OECD says the Iran war has erased the chance of a near‑term growth upgrade and left its 2026 global growth forecast unchanged at 2.9% — a sharp warning about fragility in the recovery. Eurozone growth is now pegged at just 0.8% and the OECD flags a renewed inflation risk, projecting U.S. inflation around 4.2% as energy and uncertainty bite. (reuters.com) (bloomberg.com) (nippon.com)
The OECD now projects average G20 inflation at about 4.0% for 2026, a revision it says is roughly 1.2 percentage points higher than its December outlook. (money.usnews.com) The interim report notes preliminary indicators had pointed to an upward revision of around 0.3 percentage points to 2026 global growth before the conflict — a potential upgrade the OECD says has been entirely erased. (money.usnews.com) Paris-based analysts in the report flagged a near‑halt to energy shipments through the Strait of Hormuz and damage to regional energy infrastructure as the main shock, warning the disruption is already constraining supplies of energy and fertiliser. (oecd.org) At the country level the OECD made its biggest downward revisions for the U.K., cutting 2026 growth by 0.5 percentage point and lifting its inflation forecast by 1.5 points to roughly 4%, the largest single‑country swing among major economies. (cnbc.com) The update also trimmed South Korea’s 2026 growth projection by 0.4 percentage point to 1.7%, and lowered OECD baseline global growth for 2027 by 0.1 point to 3.0% on the assumption that energy shocks linger even after a ceasefire. (pulse.mk.co.kr) Policy guidance in the report calls for well‑targeted fiscal measures with clear expiry mechanisms and warns central banks to remain vigilant because further Middle East export disruptions could prompt a wider “repricing” in financial markets. (oecd.org)
