Testing Resilience

OECD

Research

28 Pages

The OECD’s latest economic outlook incorporates the impact of the conflict in the Middle East on the global economy. It does not revise projected global GDP growth for 2026 of 2.9%, but it does revise projected global GDP growth for 2027 from 3.1% down to 3.0%.

Key Takeaways

Tailwinds: Growth is supported by strong momentum in technology-related investment and production, lower tariff rates than previously assumed, and carry-over from robust outcomes in 2025.
Headwinds: On the downside, the halt in shipments through the Strait of Hormuz and the closure and damage of some energy infrastructure has generated a surge in energy prices and disrupted the global supply of energy and other important commodities, such as fertilisers. This is raising costs, weighing on demand and adding to inflationary pressures.
Inflation: Inflation pressures will persist for longer with G20 inflation now expected to be higher in 2026 than previously projected, reflecting the surge in global energy prices. Headline inflation in the G20 advanced economies is projected to be 4.0% in 2026, 1.2 percentage points higher than previously expected, before easing to 2.7% in 2027.
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