PARIS, FRANCE / RankWire.AI / – The OECD has increased its forecast for global growth in 2026 to 2.9%, citing a more resilient world economy than previously expected. This marks an upward revision from the 2.8% predicted in the organization’s June outlook. Nonetheless, the OECD lowered its 2027 growth estimate to 3.0% from 3.1%. Investment driven by artificial intelligence continued to bolster production, trade, and overall economic activity. Rising energy prices and inflationary pressures remained significant challenges for major economies.
The September Interim Economic Outlook indicated that global growth slowed during the first half of 2026. The annualized rate declined to 2.6%, down from 3.6% during the latter half of 2025. Despite this slowdown, economic activity proved to be stronger than anticipated in many energy-importing and exporting nations. Adequate oil inventories, increased production outside the Gulf region, and alternative supply routes helped mitigate the energy shock. Additionally, lower oil demand from China contributed to balancing global energy markets.
According to the OECD, technology investment remains a significant factor supporting economic growth. Exports of semiconductors saw a sharp rise in Korea and Japan, while China also experienced an increase in technology exports. Industrial output related to technology maintained rapid expansion across much of Asia. Similar growth patterns were observed in the United States and various European countries. Consumer confidence improved in advanced economies after May, and unemployment rates stayed low in many nations. However, elevated fuel costs continued to exert pressure on household purchasing power.
US Economy Gains Strength While Euro Area Continues to Struggle
The US economy is projected to expand by 2.2% in 2026 and 2.1% in 2027. Robust investment related to artificial intelligence is supporting growth, yet slower consumer spending and weaker real income growth are tempering the overall gains. In the euro area, GDP is expected to increase by 1.0% in both years. Elevated energy prices and higher interest rates are dampening economic activity across the region. Japan’s economy is forecast to grow 0.8% in 2026 before slowing slightly to 0.7% in 2027.
China’s economy is predicted to grow by 4.5% in 2026, then slow to 4.2% in 2027. India is expected to see a 7.1% expansion in fiscal year 2026-27, following 7.8% growth in the previous fiscal year. Growth is projected at 6.5% for fiscal year 2027-28. Indonesia’s economy is forecast to expand 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is estimated to grow 1.5% this year and 1.8% next year.
G20 Inflation Rises as Energy Costs Continue to Drive Price Increases
Inflation remains a key concern highlighted in the OECD outlook. Headline inflation across G20 economies is projected at 4.1% in 2026, up from 3.4% in 2025. It is expected to ease to 3.6% in 2027. Advanced G20 nations are forecast to experience inflation of 3.2% this year and 2.6% next year. In the United States, inflation is expected to fall from 3.6% in 2026 to 2.6% in 2027. Euro area inflation is projected at 3.0% and 2.9%, respectively.
The OECD noted that rising energy prices have increased household expenses and renewed inflationary pressures in many economies. Long-term government bond yields have also climbed as public borrowing costs and debt servicing expenses grow. OECD Secretary-General Mathias Cormann stated that global growth had held up better than anticipated, though the economy remains weaker than last year. The organization emphasized the need for targeted temporary support, sustainable public finances, and enhanced long-term productivity. It also called on governments to expand skills, diversify energy supplies, and promote broader adoption of artificial intelligence.