PARIS, June 3 (Reuters) – The Organization for Economic Co-operation and Development (OECD) on Wednesday slightly lowered its forecast for global gross domestic product (GDP) for this year, noting that rising costs with the conflict in the “Middle East weighs on household demand and business activity.
In its latest updated forecasts, the organization, based in Paris, underlines that the world economy finds itself under pressure again with the evolution of the conflict in the Middle East which remains uncertain and whose consequences are likely to last for some time.
In a context of exceptionally uncertain economic conditions and prospects, the OECD presented two scenarios for the development of the world economy.
The first scenario expects “limited disruptions” over time with a gradual recovery in energy production in the Gulf economies from the end of the second quarter of 2026, while the second foresees “prolonged disruptions” with “energy production in the Gulf remaining at low levels”. until the third quarter of 2027.
In the first scenario, global GDP growth is expected to slow from 3.4% in 2025 to 2.8% in 2026, before recovering to 3.1% in 2027.
In forecasts provided in March, the OECD predicted global GDP growth at 2.9% for this year.
The OECD estimates, however, that if the current disruptions persist – the second scenario – global growth should slow significantly, to 2.1% in 2026 and 1.8% in 2027.
Regarding the evolution of consumer prices, the organization expects annual inflation in the G20 countries to increase from 3.4% in 2025 to 4.0% in 2026, before a deceleration to 3.1% in 2027, as tensions on energy and food prices gradually ease.
At the global level, global inflation would increase by 0.4 percentage points in 2026 and by 1.3 percentage points in 2027.
This “could lead certain economies to enter into recession, or at least to approach it”, warns the organization, noting that in this hypothesis unemployment could increase and investment, particularly in artificial intelligence (AI), slow down, causing a possible correction in financial markets.
Concerning the outlook by country, under the first scenario, the OECD estimates that growth should decelerate in the United States, going from 2.1% in 2025 to 2.0% in 2026, then falling to 1.8% in 2027.
In the euro zone, the organization anticipates “GDP growth which will increase from 1.4% in 2025 to 0.8% in 2026, before a recovery to 1.2% in 2027.
In the United Kingdom, growth is also expected to decline to 0.9% this year, after 1.4% in 2025, before rising to 1.1% in 2027.
In Asia, where many economies are directly exposed to disruptions caused by the conflict in the Middle East, Japan’s GDP is expected to decelerate to 0.6% in 2026, before a slight recovery to 0.8% in 2027, while in China it is expected to fall to 4.5% in 2026 and 4.3% in 2027, compared to ​5.0% in 2025.
(Written by Claude Chendjou, edited by Blandine Hénault)
