PARIS, FRANCE / RankWire.AI / – OECD has upgraded its 2026 global growth forecast to 2.9%, citing the resilience of the world economy. The estimate is higher than the 2.8% forecast in the organization’s June report. However, the OECD has lowered its 2027 forecast to 3.0% from 3.1%. Investment driven by artificial intelligence continues to bolster production, trade, and overall economic activity. Meanwhile, rising energy costs and inflation remain significant challenges for many key economies.
According to the September Interim Economic Outlook, global growth slowed during the first half of 2026. The annualized rate fell to 2.6%, compared to 3.6% in the second half of 2025. Despite the slowdown, economic activity in numerous energy-importing and exporting nations stayed stronger than anticipated. A boost came from oil inventories, extra production outside the Gulf, and alternative supply routes, which helped mitigate the energy shock. Additionally, reduced oil demand from China contributed to balancing global energy markets.
The OECD highlighted that technology investment remains a vital pillar of economic support. Sharp increases in semiconductor exports from Korea and Japan, along with China’s stronger tech exports, signaled robust growth. Technology-related industrial production continued to expand rapidly across much of Asia. Similar trends appeared in the United States and several European countries. Consumer confidence improved in advanced economies after May, and unemployment rates stayed low in many regions. Nevertheless, higher fuel prices continued to affect household purchasing power.
US economy shows growth momentum while euro area remains subdued
The US economy is projected to grow by 2.2% in 2026 and 2.1% in 2027. Investment related to AI is a key driver of activity. However, slower consumer spending and weaker growth in real income are limiting the overall gains. The euro area’s GDP is expected to increase by 1.0% in both years. High energy prices and rising interest rates are dampening activity across the region. Japan’s economy is forecast to grow by 0.8% in 2026 before a slight slowdown to 0.7% in 2027.
China’s economy is expected to expand by 4.5% in 2026, then slow to 4.2% in 2027. India is forecast to grow 7.1% in fiscal year 2026-27, following 7.8% in the previous fiscal year. Growth for 2027-28 is projected at 6.5%. Indonesia’s economy is expected to rise by 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is forecast to increase by 1.5% this year and 1.8% next year.
Inflation in G20 countries rises due to energy costs, putting pressure on prices
Inflation remains a significant concern in the OECD outlook. Overall inflation across G20 nations is projected at 4.1% for 2026, up from 3.4% in 2025. It is expected to decline to 3.6% in 2027. Advanced G20 economies are forecast to see inflation of 3.2% this year and 2.6% next year. In the US, inflation is expected to drop from 3.6% in 2026 to 2.6% in 2027. The euro area’s inflation rate is predicted at 3.0% and 2.9%, respectively.
The OECD explained that rising energy prices have pushed up household expenses and reignited inflation pressures in many economies. Yields on long-term government bonds have also increased as public borrowing and debt service costs grow. Mathias Cormann, OECD Secretary-General, stated that global growth has held up better than expected, even though the economy remains weaker than last year. The organization called for targeted, temporary support measures, sustainable public finances, and enhanced long-term productivity. It also recommended governments focus on expanding skills, diversifying energy sources, and promoting wider adoption of artificial intelligence.