OECD Warns Iran Conflict Could Cut 2026 Global Growth to 2.1% as Recession Risk Spreads
Updated
Updated · The Guardian · Jun 3
OECD Warns Iran Conflict Could Cut 2026 Global Growth to 2.1% as Recession Risk Spreads
3 articles · Updated · The Guardian · Jun 3
Summary
2.1% global growth this year is the OECD’s downside forecast if no US-Iran deal is reached until 2027, a shock it says could push some economies into or near recession.
Oil and gas shortages from the prolonged disruption would force business energy rationing, lift food and industrial input costs, and leave central banks balancing surging inflation against recession risk.
The OECD said the hit could also reach the US-led AI boom, as higher power costs and hardware constraints raise datacentre expenses and weaken incentives for AI investment.
Trump has said a deal with Tehran is near, but talks are suspended and the Strait of Hormuz squeeze has already disrupted supplies for more than three months, prompting emergency measures in many countries.
Under a peace-progress scenario, global growth would still slow to 2.8% this year before rising to 3.1% in 2027, while the OECD also flagged refinancing risks around $90tn in G20 corporate debt.
Can diplomacy reopen the Strait of Hormuz before the global economy tips into a deeper recession?
As conflict blocks one-third of the world's fertilizer, is a global food crisis now unavoidable?
With a third of global helium supply gone, how will the tech industry prevent a crippling chip shortage?
Downgraded 2026 Global Growth Forecasts: How the U.S.-Israeli War on Iran Is Reshaping the World Economy
Overview
The report highlights how the escalating U.S.-Israeli war on Iran has triggered a significant downgrade in the global economic outlook for 2026. Major institutions like the United Nations and OECD have lowered growth forecasts, citing the conflict’s broad impact on energy markets. The war has caused a surge in energy prices and disrupted the supply of critical commodities such as oil and fertilizers, leading to higher global inflation and testing the resilience of economies worldwide. These disruptions are not only slowing growth but also exposing deep vulnerabilities in global supply chains, making recovery more challenging and uncertain.