OECD Lowers 2026 Global Economic Growth to 2.8 Pct

Paris, June 3 (Jiji Press)–The Organization for Economic Cooperation and Development on Wednesday lowered its global economic growth forecast for 2026 to 2.8 pct, down by 0.1 percentage point from its previous projection released in March. The forecast is based on the assumption that crude oil prices, which have soared due to the conflict in the Middle East, will start declining from the middle of 2026, according to the OECD’s latest Economic Outlook report. Still, the OECD noted that if the turmoil, such as the de facto blockade of the Strait of Hormuz, prolongs, the global economic growth would slow down to 2.1 pct. Under an optimistic scenario, the Japanese economy is forecast to grow 0.6 pct in 2026, down 0.3 point from the previous report. “With the headwinds from the rising cost of energy imports, domestic demand will ease,” the report said, adding that export growth may also weaken. Growth projections for the United States and the eurozone remained unchanged, at 2.0 pct and 0.8 pct, respectively. The OECD raised its forecasts for China to 4.5 pct and for India to 6.3 pct. The OECD lowered its forecast for Japan in 2027 to 0.8 pct. Meanwhile, the projection for the United States was raised to 1.8 pct, pushing up the global economic growth forecast by 0.1 point to 3.1 pct. Under a pessimistic scenario, global economic growth is expected to decline to 1.8 pct in 2027. The OECD said that if disruptions to shipments through the Strait of Hormuz continue for a long time, some economies may be pushed “into or close to recession,” warning of rising unemployment, falling investment and rising financial market risks. At a two-day OECD ministerial meeting at its headquarters in Paris starting Wednesday, participants will discuss strengthening economic security and industrial policies aimed at improving productivity and competitiveness. END [Copyright The Jiji Press, Ltd.]