OECD Boosts Global Growth Forecast Amid Middle East Conflict

The Organisation for Economic Co-operation and Development (OECD) has upgraded its 2026 global economic growth forecast to 2.9%, citing the world economy's resilience in the face of energy supply shocks triggered by the conflict in the Middle East.

In its interim outlook, the OECD noted that sizeable oil inventories, extra supply from producers outside the Gulf, and discretionary government support measures have softened the blow of soaring energy prices.

The US is now expected to grow 2.2% this year, up 0.2 percentage points, while the eurozone's growth forecast rose by the same margin to 1%. Japan's projection increased to 0.8%, and China's remained unchanged at 4.5%.

The OECD warned that central banks have begun raising interest rates to contain inflation driven by high oil and gas prices, which has pushed diesel costs to multi-year highs. Headline inflation in G20 countries is projected at 4.1% this year, while the OECD expects it to reach 3% in the eurozone.