113th Meeting of the Development Committee - Statement by Mathias Cormann and Carsten Staur - Economic outlook and strengthening development co-operation

Jul 19, 2026

Statement by Mathias Cormann and Carsten Staur for the 113th Development Committee meeting addresses macroeconomic pressures from the evolving Middle East conflict, including disruption to shipments through the Strait of Hormuz, higher energy prices, and reduced global commodity supply. It reviews OECD projections for global GDP and highlights rising debt risks in emerging markets and developing economies. The statement outlines declining official development assistance budgets, and describes reforms to improve allocation models, implementation of the 2030 Pact for Effective Development Cooperation, and evidence-based country-level monitoring to strengthen development effectiveness.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages6

Reading Time15 min

Economic outlook

Middle East conflict and global growth projections

Debt sustainability pressures in developing economies

Strengthening the effectiveness of development co-operation

Trends in official development assistance funding

Modernising allocation models and planned toolkit

2030 Pact Dialogue and monitoring of effectiveness

Country-level analysis and OECD-UNDP Global Partnership

Public Disclosure Authorized Public Disclosure Authorized DEVELOPMENT COMMITTEE (Joint Ministerial Committee of the Boards of Governors ofthe Bank and the Fund on the Transfer of Real Resources to Developing Countries) ONE HUNDRED AND THIRTEENTH MEETING WASHINGTON, DC – APRIL 16, 2026 DC/S/2026-0009 April 16, 2026 Statement by Mathias Cormann OECD Secretary-General and Carsten Staur Chair of the OECD Development Assistance Committee OECD Statement by Mathias Cormann OECD Secretary-General and Carsten Staur Chair of the OECD Development Assistance Committee OECD 113th Meeting of the Development Committee April 16, 2026 Washington, DC Economic outlook 1. The evolving conflict in the Middle East is testing the resilience of the global economy. Disruptions to shipments through the Strait of Hormuz and energy infrastructure have caused a surge in energy prices and reduced the global supply of oil, gas and other key commodities, such as fertilisers. The most immediate risks are for economies across Asia that are particularly reliant on energy imports from the Gulf region. However, the commodity price shocks are already being felt around the world and, if sustained, will raise business costs and consumer price inflation while weakening growth. 2. Global GDP growthis projected to be 2.9% in 2026 and 3.0% in 2027, according to the OECD Interim Economic Outlook from 26 March 2026. 1 This is lower than the pre-conflict growth path at the beginning of the year, reflecting declining business and consumer sentiment and elevated uncertainty. In part, these negative factors are being offset by robust growth in technology-related investment and production, lower effective US tariff rates as of late February, and strong momentum in economic activity carried over from 2025. 3. In emerging markets and developing economies, pressures on debt sustainability continue to increase. The OECD’s 2026 Global Debt Report shows that sovereign bond debt in non-OECD emerging market and developing economies reached a record USD 12.1 trillion in 2025, equivalent to around 30% of GDP, up from USD 5.3 trillion, or 21% of GDP in 2015. For nearly 20% of the bond debt issued by lowincome countries in 2025, interest payments will exceed the principal amount, a significant increase from 6% in 2019. Strengthening the effectiveness of development co-operation 4. Official development assistance continues to provide a key source of external finance for developing countries to navigate these pressures, despite the reduction in development aid budgetsin 2025. The OECD’s preliminary data show that official development assistance from member and associate countries of the OECD Development Assistance Committee amounted to USD 174.3 billion in 2025, down from USD 215.1 billion in 2024. This represents a reduction of 23.1% in real terms, the largest annual drop since the OECD began tracking these data. We project a further decline of 5.8% in official 1 Projections are based on the technical assumption that energy prices evolve in line with futures markets pricing for oil and gas as of 20 March. development assistance in 2026, without accounting for the potential impact of the evolving conflict in the Middle East. 5. Modernising public development finance allocation models and criteria can help ensure available funding is used as effectively as possible. Better-targeted, more catalytic and cost-effective funding allocation can increase value for money for development aid providers. As part of the OECD’s flagship Development Co-operation Report to be launched in October 2026, we will present a new toolkit with practical guidance for a more efficient allocation of official development finance to maximise impact, notably reducing fragmentation and better matching concessional financing with the priorities and needs of partner countries for their social and economic progress. 6. These efforts are further reinforc

FAQs

How does the evolving conflict in the Middle East affect the global economy?

It disrupts shipments through the Strait of Hormuz and energy infrastructure, pushing up energy prices and reducing global supply of oil, gas, and key commodities. The shocks raise business costs and consumer inflation risk while weakening growth worldwide.

What does the statement say about global GDP growth in 2026 and 2027?

Global GDP growth is projected at 2.9% in 2026 and 3.0% in 2027, reflecting weaker business and consumer sentiment and elevated uncertainty compared with earlier projections.

How is development co-operation effectiveness expected to be strengthened?

The statement emphasizes better-targeted, more catalytic, and cost-effective allocation of official development finance, supported by modernised allocation models and an OECD toolkit. It also highlights the 2030 Pact for Effective Development Cooperation and country-level evidence from monitoring cycles.

Jul 19, 2026

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