AFP, PARIS, France
The war in the Middle East has dented economic growth prospects worldwide, with a more severe shock likely if no effective ceasefire is agreed before next year, the Organisation for Economic Cooperation and Development (OECD) warned yesterday.Global economic growth is now forecast to slip to 2.8 percent for this year if Gulf exports of oil and gas return to pre-conflict levels in the third quarter, the group of 38 industrialized countries said in its quarterly update. Previously, the OECD had forecast full-year global growth of 2.9 percent.However, if the Mideast war continues into next year, global growth could slow to 2.1 percent, the OECD said — well below the average annual growth of 3.4 percent seen from 2013 to 2019, before the COVID-19 pandemic.
The logo of the Organisation for Economic Cooperation and Development (OECD) is pictured at the OECD headquarters in Paris on Sept. 22 last year.
"The longer the disruptions last, the larger the economic and social costs become," OECD chief economist Stefano Scarpetta said in the report. Many countries would risk falling into recession, he noted, and a drop in investment spending — "including in energy-intensive AI" — would likely push up unemployment.Sustained high prices for energy as well as fertilizer and other key products from hydrocarbon production in the Gulf would weigh especially hard on developing countries that have "higher shares of energy and food in household consumption."
