The OECD has cut its global growth outlook, warning that the fate of the global economy hinges on the conflict in the Middle East. According to a report, the war has already stifled growth, and its consequences are likely to be felt for some time, potentially causing lasting damage.
The conflict could trigger significantly stronger inflation and push some economies into outright recession. These risks are particularly high if energy disruptions persist well into next year, with Asian countries reliant on Middle East energy supplies expected to be hit the hardest.
Economic growth prospects worldwide have been dented, but the OECD warns of a more severe shock if no effective ceasefire is agreed upon before 2027. Many countries would risk falling into recession if the war continues into that year.