JAKARTA - The Organization for Economic Cooperation and Development (OECD) stated that global economic growth in 2026 is expected to slow sharply to 2.1 percent from 3.4 percent in 2025 if the disruption due to the conflict in the Middle East continues until 2027.
Meanwhile, in a scenario where disruptions, including to shipments through the Strait of Hormuz, only last temporarily and energy prices begin to gradually ease from mid-2026, the Paris-based organization estimates that global economic growth will slow to 2.8 percent.
The figure is slightly lower than the 2.9 percent expansion forecast the OECD presented in March, according to the agency's latest economic outlook report.
"The development of the conflict in the Middle East is still uncertain, but its economic consequences will likely continue to be felt for some time even after the conflict ends," the OECD said in its explanation of the latest analysis, which considers two scenarios, namely short-term disruption and long-term disruption. reported by ANTARA from Kyodo-OANA, Wednesday, June 3.
In a more pessimistic scenario, the OECD estimates that global economic growth will slow again to 1.8 percent in 2027.
"Unemployment will increase and investment, including investment in artificial intelligence (AI) which requires high energy consumption, will weaken significantly, with increased risk of price adjustments in financial markets," the organization said.
In the per-country projections, the OECD only presents estimates based on short-term disruption scenarios.
Japan's economy is forecast to grow 0.6 percent in 2026, down 0.3 percentage points from the March projection, as rising costs of imported energy weigh on the resource-poor country.
For the United States, the OECD maintained its growth projection of 2.0 percent in 2026. The organization noted that although uncertainty due to conflicts in the Middle East is expected to dampen household consumption growth, strong investment in the artificial intelligence sector will continue to support the economy.
The OECD also estimates that China's economy will grow by 4.5 percent in 2026, up 0.1 percentage point from the previous projection. Meanwhile, the eurozone's growth projection remains at 0.8 percent.
For 2027, the OECD estimates that global economic growth will recover to 3.1 percent if the disruption is relatively short.
In this scenario, Japan's economy is projected to grow 0.8 percent, the United States 1.8 percent, China 4.3 percent, and the euro area 1.2 percent.
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