The world is facing a slowdown in growth that could drag some countries into recession “or close to it,” according to forecasts published this Wednesday by the Organisation for Economic Co-operation and Development (OECD). The worst-case scenario considered by the organization, with the war in Iran active and the Strait of Hormuz blocked until well into 2027, estimates global GDP growth of only 2.1% in 2026, worsening to 1.8% in 2027. The figure may seem acceptable for many mature economies that are moving in even worse numbers, but it is clearly a slower pace than usual: in the 21st century, global activity has recurrently experienced increases above 3%, with the negative intervals of the financial crisis and the pandemic.
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The OECD’s baseline scenario is currently somewhat more favorable. It would occur if energy prices retreat from mid-year — that is, imminently, something only expected if solid peace is announced —. And it would imply a much softer blow, with GDP growth of 2.8% in 2026 and 3.1% in 2027. That means a negotiation failure would devour two points of global GDP in two years, equivalent to just over two trillion euros. Or in other words, a figure greater than all the goods and services Spain generates in a year would evaporate.
The inability to make reliable predictions given the changing geopolitical environment is pushing institutions and analysis services to include various scenarios in their studies, to avoid forecasts becoming worthless overnight. The words uncertain or uncertainty appear 140 times in the 297 pages of the text, practically once every two pages.
The impact, in any case, will be uneven. The entity especially points to two major victims: Asia, due to its dependence on energy produced in the Middle East, and the Persian Gulf countries themselves, which are seeing their main source of income, crude oil, cut off with the closure of the Strait of Hormuz and face the multimillion-dollar bill to repair their energy infrastructures. That does not mean the rest will be immune to the blow. “Higher inflation, shortages, tighter financial conditions, and lower confidence could also significantly weaken growth in Europe and North America,” warns the OECD.
More generally, the effects will be harmful for “developing economies that import raw materials, as they have the least capacity to attract scarce supplies or protect households and businesses from crises.” That is, those countries without gas or oil deposits that also lack resources to launch tax cut packages like the one implemented by Spain — valued at about 5 billion.
The report describes a potential vicious circle in which the war would fuel inflation, which would lead central banks to raise interest rates, and the real economy would end up paying the price. “Business investment would be affected by higher capital costs and weak demand, decreasing by nearly 5% in the second half of 2027 compared to the temporary disruption scenario.”
Artificial intelligence, the great hope for productivity improvement, would not escape the blow either. Rising energy costs would increase the expenses of running data centers and limit the supply of critical hardware used in AI systems, the OECD warns. Added to this is the shortage of raw materials such as helium, key for manufacturing the most advanced microchips necessary for this industry to continue its takeoff. “These effects could further reduce the capacity and incentive for AI investment, resulting in notably weaker growth in economies currently driven by AI-related investment and production,” the document states.
Improves Spain’s outlook
As for Spain, the organization has raised its growth forecast for 2026 by one-tenth in its baseline scenario compared to the March estimate: it now estimates GDP growth of 2.2% this year, the same percentage the Government forecasts and well above Germany (0.7%), France (0.7%), and Italy (0.5%). For 2027, it leaves its prediction unchanged at 1.7%. “Spain strengthens its leadership in economic growth among the major European economies,” the Ministry of Economy celebrated upon learning the data.
Spain is showing greater resilience to geopolitical turbulence: it is the only major euro economy improving its estimates, and its figures are clearly above the average of the single currency countries, 0.8% this year and 1.2% the next. “Growth will continue to be driven by domestic demand, with private consumption supported by strong employment growth and investment benefiting from EU-funded projects,” the OECD points out. It is less optimistic about the Spanish external sector: the activity boost will increase imports, and foreign demand for Spanish products will not compensate for it.
Regarding inflation, it predicts a long period of price increases for Spain, with the harmonized CPI (the one using European standards) at 3.3% in 2026 and 2.9% in 2027, still well above the European Central Bank’s target (around 2%), although below the G-20 average, 4% this year and 3.1% next. “Compared to February 27, the price of crude oil, petroleum products, natural gas, sulfur, and fertilizers such as urea has increased considerably,” it highlights.
Tax cuts to mitigate the rise in energy prices for households will reduce the damage, but the OECD, like the IMF, is not in favor of universal discounts, because they also benefit high incomes and represent a greater expense for public coffers in a context of high debt. “These measures should be better targeted at vulnerable social groups and be temporary to cushion the social impact of rising energy prices, while limiting fiscal costs.”
Despite the extra expenses of the aid package, Spanish public debt will continue its downward path thanks to strong growth: in 2026 it will stand at 98.5% of GDP, and in 2027 at 97.3%. Another positive threshold to be broken concerns unemployment, which will fall below the 10% barrier next year — it closed the first quarter at 10.8%, according to the Labour Force Survey.
The outlook, positive compared to other major economies, coexists with various recommendations. The OECD believes Spain should take advantage of the current economic dynamism to rebuild fiscal space and thus be prepared both for future crises and for the aging population horizon it faces, which multiplies health and pension expenses, as well as laying the foundations for greater productivity growth.
