The conflict in the Middle East, according to the OECD, is significantly fueling global inflation – up to 4.2% in the United States – due to the energy shock, while also posing an increased risk of economic slowdown despite varying impacts across countries. Geopolitical tensions in the Middle East are abruptly reshaping the global economy. According to the latest OECD projections, the conflict involving the United States, Israel, and Iran is expected to trigger a sharp acceleration of inflation, especially in the United States. The organization anticipates a price increase of up to 4.2% in the United States this year (compared to 2.6% in 2025), making it the highest among G7 countries. During the previous inflation shock, prices in the United States rose by an average of 8.2% in 2022 and 5.7% in 2023 before dropping to 2.8% in 2024. The inflationary pressure will be felt everywhere, but to varying degrees according to the organization. It is forecasted to be 4% in the UK (3.4% in 2025), 2.9% in Italy (1.6% in 2025), and 1.8% in France (0.9% in 2025), which would be the lowest among G20 countries after China. “In the advanced economies of the G20, overall inflation is expected to reach 4% in 2026, 1.2 percentage points higher than initially expected,” warns the OECD, before retreating to 2.7% in 2027 due to easing energy price tensions. This inflationary shock is mainly driven by the surge in energy prices. Oil and natural gas prices have significantly risen since the hostilities began at the end of February, affecting other strategic raw materials in their wake. Context: OECD refers to the Organisation for Economic Co-operation and Development. Fact Check: France was projected to have a 0.8% growth rate in the year mentioned.
Context: OECD (Organisation for Economic Co-operation and Development) is a global organization that aims to promote policies to improve the economic and social well-being of people worldwide.
