OECD Warns Global Recession Risk Could Rise if War Persists

The Organisation for Economic Co-operation and Development has warned that the world economy faces a growing global recession risk if conflict in the Middle East continues into next year and disrupts energy supplies.

The OECD said prolonged instability could weaken growth, increase inflation and force central banks to maintain tighter monetary policies.

Under its baseline scenario, global growth is expected to slow from 3.4% in 2025 to 2.8% in 2026 before recovering to 3.1% in 2027.

However, the OECD said the global recession risk would increase significantly if energy supply disruptions persist, with growth potentially slowing to 2.1% in 2026 and 1.8% in 2027.

The organisation noted that Asian economies dependent on Middle Eastern energy imports would be among the most vulnerable.

Higher energy prices could also add 1.3 percentage points to global inflation by 2027.

The warning highlights the economic consequences of geopolitical instability and energy-market disruptions.