US/Israel-Iran conflict weakens the growth outlook

Each month Oxford Economics’ team of 450 economists and analysts updates our baseline forecast for 200+ countries using our innovative Global Economic Model. Fully linking individual country models through global assumptions about trade volume and prices, competitiveness, capital flows, interest and exchange rates, and commodity prices, our model provides a rigorous and consistent structure for forecasting and understanding the impact of economic shocks.

Below is just the top-level summary of our analysis of the latest economic developments.

• The US/Israel-Iran conflict and the associated surge in energy prices have prompted us to revise our world GDP growth forecast down by less than 0.1ppt from a month ago.
• At 3.0%, our 2026 GDP growth forecast assumes that further sharp and sustained rises in the oil price are avoided.
• The risk of more prolonged energy market disruption and greater adverse spillovers add downside risk to our global outlook.

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