Economic turbulence is further aggravated by the ongoing conflicts between the U.S., Iran, and Israel. Global economic growth continues to suffer due to these ongoing military tensions.
The Organisation for Economic Co-operation and Development (OECD) released its latest economic outlook report on June 3, forecasting global economic growth for 2026 to be 2.8%, a slight 0.1 percentage point decrease from the March estimate.
In the worst-case scenario, the growth rate would drop to as low as 2.1%. Only if peace agreements are swiftly reached can the global economic outlook be swiftly alleviated from pressure.
According to the latest report, the ongoing developments in the Middle East conflict are causing severe humanitarian impacts and testing the resilience of the global economy. The duration and scope of the conflict still remain uncertain. The current situation is highly unpredictable, and the global economic outlook largely depends on whether a lasting resolution to the conflict can be achieved. The new economic outlook report presents two possible scenarios for the next 18 months, based on the evolution of the energy crisis, the timeline for achieving peace, and subsequent policy responses, highlighting potential outcomes that could emerge.
The OECD is composed of 38 market economies and was established on September 30, 1961, headquartered in Paris, France. The organization aims to address the economic, social, and governance challenges brought by globalization while seizing the opportunities it presents.
Last quarter, the OECD predicted the 2026 global economic growth rate would remain unchanged at 2.9%. The report noted that uncertainty surrounding the Middle East situation poses a significant challenge to the global economy’s resilience. If energy prices remain high for an extended period, it will significantly increase corporate costs and push inflation higher, dragging down the global economic outlook.
The report’s forecast is based on the assumption that global energy supply disruptions will gradually ease from mid-2026. If exports from the Middle East remain blocked, energy prices could further rise, exacerbating shortages in key commodities, driving up inflation, and restraining growth.
Recently, U.S. Secretary of State Rubio stated in a congressional hearing that the U.S. is actively working to separate peace talks with Lebanon from those with Iran. President Trump later announced that negotiations with Iran are “moving forward at a rapid pace” and expects to reach a deal with Tehran “within the next week” to extend a ceasefire and reopen the Strait of Hormuz.
The planned 60-day ceasefire between the U.S. and Iran is expected to end by late July, but the agreement has not yet been fully implemented. Meanwhile, military conflicts in the Gulf region continue to spread.
Additionally, Iran’s Foreign Ministry has received approval from Supreme Leader Mojtaba Khamenei to establish a special working group on the Strait of Hormuz issue. This group will coordinate with other institutions, including the armed forces, to draft legal frameworks related to the Strait.
Since the U.S.-Iran-Israel war began at the end of February this year, it has clearly had a negative impact on the global economy. The Strait of Hormuz handles over 30% of the world’s crude oil and more than 40% of liquefied natural gas. After the conflict erupted, international oil prices surged from $80 to $120 per barrel, significantly increasing energy costs and driving up prices of daily goods, logistics, agricultural fertilizers, and more.
Blockades in the Strait have also disrupted shipping, forcing trade routes to be rerouted, which has increased global trade logistics and insurance costs, further amplifying supply chain risks. Additionally, commodity prices such as crude oil, gold, and basic metals have been heavily influenced by developments in U.S.-Iran tensions.
At today’s regular press conference, a journalist asked about the current situation regarding the U.S. and Iran. Spokesperson Mao Ning stated that China is deeply concerned about the current situation and that the resumption of hostilities benefits no one. It is hoped that all parties will cherish the opportunity for peace and achieve a comprehensive and lasting ceasefire as soon as possible.
