US, June 04 : The Organisation for Economic Co-operation and Development (OECD) has issued a fresh warning that a prolonged conflict in the Middle East could significantly slow global economic growth while fueling inflationary pressures worldwide. The assessment comes amid continuing uncertainty over energy supplies and shipping routes that are crucial for international trade.
According to the OECD, the baseline forecast assumes a gradual normalization of oil and gas production in the Gulf region. Under this scenario, global growth is expected to moderate before recovering in 2027. However, if geopolitical tensions continue to disrupt energy flows, the world economy could face one of its weakest growth periods since the global financial crisis.
Energy prices remain at the center of concern. Oil-producing nations in the Gulf play a critical role in supplying global markets, and any sustained disruption has the potential to affect transportation, manufacturing, and consumer prices across continents. Economists warn that higher fuel costs could trigger additional inflationary pressures, forcing central banks to maintain tighter monetary policies for longer periods.
The report highlights varying regional impacts. While energy-exporting economies may benefit from elevated commodity prices, energy-importing nations in Asia and Europe could face increased costs and slower industrial activity. Businesses are also monitoring shipping disruptions and supply chain challenges that may emerge if tensions escalate further.
Financial markets reacted cautiously to the warning, with investors closely watching developments in diplomatic negotiations aimed at stabilizing the region. Analysts believe that restoring confidence in energy markets will be essential for sustaining economic momentum through the remainder of the year.
The OECD’s assessment serves as a reminder that geopolitical developments continue to influence economic prospects worldwide. Policymakers are expected to intensify efforts to diversify energy sources and strengthen supply chain resilience to mitigate future risks. The coming months will be crucial in determining whether the global economy can avoid a sharper slowdown and maintain a stable growth trajectory.