The Iran war is "testing the resilience of the global economy," and is set to dampen economic growth this year, the Organisation for Economic Co-operation and Development (OECD) said in a report released on Thursday.

Global growth is forecast to slow to 2.9% this year before edging back up to 3.0% in 2027, according to the OECD.

The unpredictable trajectory of the Middle East conflict was driving up costs and dampening demand, offsetting the positive impetus from investment in new technologies and the momentum carried over from the previous year, it said.

The blockade of the Strait of Hormuz and damage to energy infrastructure had caused a sharp rise in energy prices and disrupted supplies of other key materials such as fertilizer, according to the OECD.

The scale and duration of the conflict were highly uncertain, but a prolonged period of higher energy prices would significantly increase costs for businesses and consumer prices, with negative consequences for growth, the OECD said.

The "evolving conflict [...] generates significant uncertainty around global demand," it said.

In the US, growth is expected to slow from 2.0% this year to 1.7% next year, the OECD forecast, as strong investment in artificial intelligence is gradually offset by a slowdown in income growth and consumer spending.

In the eurozone, the OECD expects growth to slow to 0.8% this year before recovering to 1.2% in 2027, boosted by higher defence spending.

In China, growth is projected to fall to 4.4% in 2026 and 4.3% in 2027.

The conflict was also weighing on the growth of the German economy, which the OECD said would grow by only 0.8% this year - 0.2 percentage points less than forecast in its previous economic outlook in December.

Growth of 1.5% is still expected for 2027, unchanged from the previous forecast.