OECD: Iran war erases global growth upgrade, fans inflation

The escalating conflict in the Middle East has knocked the global economy off a stronger growth path, the OECD warned on Thursday, as a near-halt in energy shipments through the Strait of Hormuz threatens to push inflation sharply higher. The Paris-based Organisation for Economic Cooperation and Development said the global economy had been on course for stronger-than-expected growth before the war in Iran erupted, but that prospect has now all but disappeared. Global GDP growth is now projected to ease to 2.9% in 2026. With energy prices soaring, G20 inflation is projected to be 1.2 percentage points higher than previously expected at 4.0%. The OECD urged central banks to remain vigilant and called on governments to ensure support measures were well-targeted.