### OECD Cuts Global Growth Outlook on Energy Shocks & Inflation 📈

The OECD March 2026 Interim Report has reversed previous upward revisions, forecasting a slowdown in global GDP growth due to escalating Middle East conflict and surging energy costs. • Overall Figures Global GDP growth is projected at 2.9% for 2026 and 3.0% for 2027. G20 headline inflation is expected to spike to 4.0% in 2026 (up from 3.4% in 2025) before easing to 2.7% in 2027. Brent crude and European gas prices are forecast to be 40% and 60% higher, respectively, than late 2025 projections. • Impact on Major Economies USA: Growth to ease from 2.0% in 2026 to 1.7% in 2027 as purchasing power declines. Euro Area: Growth slowed to 0.8% in 2026 (from 1.4% in 2025) due to high energy costs. India & China: Growth moderating; China projected at 4.4% (2026) and India slowing as fiscal support fades and energy costs rise. • National Context & Risks As an import-dependent economy, Sri Lanka faces headwinds from higher energy & fertiliser prices, which could strain the tea and apparel & textiles sectors through increased production and logistics costs. Rising global inflation may dampen demand in key export markets (US/EU), impacting the ICT/BPM and manufacturing sectors. Net energy importers with limited inventories are flagged as most vulnerable to these "terms of trade" shocks.