PARIS, FRANCE / RankWire.AI / – OECD has increased its forecast for global growth in 2026 to 2.9%, reflecting a more resilient world economy than initially anticipated. This upward revision moves from the 2.8% predicted in the organization’s June outlook. Nevertheless, the OECD has lowered its 2027 projection to 3.0% from 3.1%. Continued strong investment in artificial intelligence has maintained support for production, trade, and overall economic activity. Meanwhile, rising energy costs and inflationary pressures remain significant challenges across major economies.
The September Interim Economic Outlook indicated a slowdown in global growth during the first half of 2026, with an annualized rate dropping to 2.6%, compared to 3.6% during the latter half of 2025. Despite this deceleration, many energy-importing and exporting nations experienced economic activity stronger than expected. Factors such as oil inventories, additional production outside the Gulf, and alternative supply channels helped mitigate the energy shock. Additionally, reduced oil demand from China contributed to balancing global energy markets.
The OECD emphasized that technology investment continues to be a vital driver of economic resilience. Exports of semiconductors surged notably in Korea and Japan, with China also showing increased technology exports. Technological industrial production maintained rapid growth across much of Asia, with similar trends observed in the United States and several European nations. Consumer confidence has improved in advanced economies since May, and unemployment rates remain low in numerous countries. However, elevated fuel prices continue to dampen household purchasing power.
US Economy Gains Strength While Eurozone Growth Remains Weak
The US economy is projected to expand by 2.2% in 2026 and 2.1% in 2027. Robust AI-related investments are underpinning growth, but softer consumer spending and sluggish real income growth are limiting overall progress. The euro area’s GDP is expected to grow by 1.0% in both years, with high energy prices and interest rate hikes dampening 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 increase by 4.5% in 2026, then slow to 4.2% in 2027. India is expected to grow 7.1% in the 2026-27 fiscal year, following a 7.8% expansion in the previous fiscal year. Growth projections for 2027-28 stand at 6.5%. Indonesia’s economy is forecast to grow 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is expected to rise by 1.5% this year and 1.8% in the following year.
Energy Costs Drive Up Inflation in G20 Countries
Inflation continues to be a key concern within the OECD forecast. Overall inflation across G20 nations is forecasted at 4.1% in 2026, up from 3.4% in 2025, and is expected to ease to 3.6% in 2027. The advanced G20 economies are projected to see inflation of 3.2% this year and 2.6% in 2027. Specifically, the United States’ inflation rate is expected to decrease from 3.6% in 2026 to 2.6% in 2027, while euro area inflation is forecast at 3.0% and 2.9%, respectively.
The OECD highlighted that rising energy prices have increased household expenses and reignited inflationary pressures in numerous economies. Additionally, long-term government bond yields have risen due to increased public borrowing and debt servicing costs. OECD Secretary-General Mathias Cormann stated that global growth has held up better than initially expected, although the economy remains weaker than last year. The organization advocates for targeted short-term support, sustainable public finances, and enhanced long-term productivity. It also recommends that governments expand skills, diversify energy sources, and promote wider adoption of artificial intelligence.