OECD warns of global economic setback as Iran war drags on

"We made an initial assessment in our economic analysis in March, but we will revise it in the coming weeks. It is clearly downward pressure on growth and upward pressure on inflation," Cormann says.

According to Cormann, the challenge for central banks will be to manage higher inflation and lower economic activity when they make interest rate decisions.

Usually you can see through an energy price shock, but if it starts to affect prices more broadly and you see wage increases as indirect effects - then central banks need to act even if the growth outlook is somewhat weaker.