OECD Flags ‘Dark Scenario’ as Gulf Energy Crisis Persists, Global Growth at Risk

Gulf energy crisis threatens global growth, OECD warns

The Organisation for Economic Co‑operation and Development issued a stark warning on Tuesday that if the Gulf energy crisis drags on, world GDP could contract to levels unseen since the Covid‑19 pandemic. Analysts project a ↓ 2.5% slowdown in advanced economies by 2025, while emerging markets may see ↓ 3.1% growth. Energy‑dependent nations are already tightening fiscal buffers, and central banks could face a dilemma between curbing inflation and supporting demand.

“A prolonged supply shock in the Gulf could trigger a cascade of policy missteps,” said a senior economist at Reuters.

The OECD’s scenario mirrors earlier projections by the IMF, which highlighted the fragility of growth pathways amid soaring oil prices. Policymakers in Europe and Asia are urged to diversify energy sources and accelerate the transition to renewables, lest the crisis deepen the global slowdown. For further insight, see the latest report from Bloomberg.

Words by Arthur Sterling (Macroeconomics Editor).