OECD rules out stagflation risk from Iran crisis

The Organisation for Economic Co-operation and Development (OECD) ruled out today, April 23, a stagflation scenario for the global economy linked to the ongoing Iran crisis, stressing the current indicators do not point to a repeat of the structural shocks seen in past decades.

Secretary-General Mathias Cormann made the remarks during a panel at the Delphi Economic Forum in Greece, saying stagflation is not a baseline assumption in the organization’s outlook, Reuters reported.

Cormann added that concerns over a 1970s-style scenario, where weak growth coincides with surging prices, are misplaced under current conditions.

He also noted that today’s inflation dynamics differ fundamentally from previous crises, adding that recent price increases are mainly driven by a specific supply shock in energy markets.