- The Organization for Economic Co-operation and Development forecasts global GDP growth to slow from 3.4% in 2025 to 2.8% in 2026 due to an energy shock and inflationary pressures stemming from the Middle East conflict
- A moderate recovery to 3.1% expected in 2027 if disruptions begin easing by mid-2026, according to its June 2026 Economic Outlook
- The OECD warned that extended Middle East disruptions through 2027 could drag global GDP growth even lower to 2.1% this year and 1.8% next year — disproportionately hurting developing nations, Asia, and Europe
- G20 growth plateaus at 3%, and Europe remains sluggish with Eurozone growth forecast at a modest 0.8% this year
The Organization for Economic Co-operation and Development (OECD) forecasts global GDP growth to slow to 2.8% in 2026 from 3.4% in 2025 as an ongoing conflict in the Middle East triggers an international energy shock and intensifies inflationary pressures.
Under this baseline scenario – which assumes disruptions to Gulf energy production begin to ease by mid-2026 – global growth is expected to recover moderately to 3.1% in 2027, the Paris-based organization said in its June 2026 Economic Outlook.
However, the OECD warned that a prolonged conflict extending disruptions into 2027 could severely worsen the downturn, lowering global GDP growth to 2.1% this year and 1.8% next year. This secondary outlook would disproportionately affect developing nations, Asia, and Europe due to sustained high commodity prices and tightened credit markets.
The baseline growth deceleration is visible across the world’s largest economies. According to OECD data, U.S. GDP growth is projected to edge down from 2.1% in 2025 to 2.0% in 2026, before slowing further to 1.8% in 2027. China’s economy is forecast to decelerate from 5.0% last year to 4.5% in 2026 and 4.3% in 2027.
Major emerging markets are also experiencing pullbacks despite leading global output. India’s growth is projected to drop from 7.6% in 2025 to 6.3% in 2026 before flattening at 6.4% in 2027, while Indonesia will ease from 5.1% to 4.7% this year. Meanwhile, growth across the broader G20 economies is expected to plateau at 3.0% in both 2026 and 2027, down from 3.3% in 2025.
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