The Organization for Economic Co-operation and Development (OECD) assesses that the ongoing conflict in the Middle East is hindering global economic growth while also driving inflation higher. In its latest report, the OECD projects that global economic growth will slow from 3.3% last year to 2.9% in 2026.

According to its March 2026 report titled OECD Outlook, Interim Report: Testing Resilience, global growth is expected to recover to around 3% in 2027. The escalation of conflict in the Middle East has affected key drivers of global economic expansion, particularly due to the closure of the Strait of Hormuz, which has nearly halted energy shipments worldwide.

Prior to the outbreak of war between Iran and the alliance of the United States and Israel, the OECD had anticipated stronger global economic growth. However, the surge in energy prices and the unpredictable nature of the conflict have erased the positive momentum previously supported by technology investment.

“There is a high level of uncertainty regarding the duration and scale of the Middle East conflict. This significantly affects the economic outlook, which may deteriorate further, with lower growth and higher inflation,” said OECD Secretary-General Mathias Cormann, as quoted by Reuters on Sunday (March 29, 2026).

With energy prices surging, inflation across G20 countries is projected to reach 4.0% in 2026, which is 1.2 percentage points higher than earlier estimates.

The OECD also outlined a worst-case scenario in which persistently high energy prices could reduce global growth by an additional 0.5%, while at the same time pushing global inflation up by another 0.9%.

In fact, if the conflict had not occurred, the OECD had planned to revise its 2026 global growth forecast upward by 0.3 percentage points. However, this potential increase has now been wiped out due to the impact of the war.