PARIS, FRANCE / RankWire.AI / – The OECD has increased its forecast for global expansion in 2026 to 2.9%, citing a stronger-than-anticipated resilience in the world economy. This revision marks an upward adjustment from the 2.8% predicted in the organization’s June outlook. Conversely, the OECD has lowered its projection for 2027 slightly, from 3.1% to 3.0%. Continued robust investment related to artificial intelligence has been a key factor supporting production, trade, and overall economic activity. Nonetheless, rising energy prices and inflationary pressures persisted across major economies.
According to the September Interim Economic Outlook, global growth decelerated during the first half of 2026. The annualized rate declined to 2.6%, down from 3.6% in the second half of 2025. Despite this slowdown, economic activity remained stronger than initially expected in many energy-importing and exporting nations. Contributing factors such as oil inventories, increased production outside the Gulf, and alternative supply routes helped mitigate the energy shock. Additionally, decreased oil demand from China contributed to balancing global energy markets.
The OECD highlighted that technology investment continues to serve as a key driver of economic support. Sharp growth in semiconductor exports was observed in Korea and Japan, with China also recording increased technology exports. Industrial output related to technological advancements maintained rapid expansion across much of Asia. Similar trends were evident in the United States and various European economies. Consumer confidence improved in advanced economies after May, and unemployment rates stayed low in many regions. However, persistent high fuel costs continued to strain household purchasing power.
US economic growth gains momentum while euro area remains sluggish
Forecasts suggest the United States economy will grow by 2.2% in 2026 and 2.1% in 2027. Investment related to artificial intelligence is bolstering activity, yet slower consumer spending and modest growth in real incomes are constraining overall gains. The euro area’s GDP is expected to increase by 1.0% in both years, weighed down by higher energy costs and interest rates impacting the region’s economic performance. Japan’s economy is projected to expand by 0.8% in 2026, with a slight slowdown to 0.7% in 2027.
China’s economy is forecasted to grow by 4.5% in 2026 before easing to 4.2% in 2027. India is expected to expand by 7.1% in fiscal year 2026-27, following 7.8% growth in the prior year. Growth estimates for fiscal year 2027-28 stand at 6.5%. Indonesia’s economy is projected to increase by 5.2% in 2026 and 5.1% in 2027. Mexico’s economic growth is anticipated to reach 1.5% this year and 1.8% in the following year.
Inflation in G20 economies rises amid energy-driven price pressures
Inflation remains a central concern within the OECD outlook. Overall inflation across G20 nations is projected at 4.1% in 2026, up from 3.4% in 2025, and is expected to decrease to 3.6% in 2027. The advanced economies within the G20 are forecasted to experience inflation rates of 3.2% this year, followed by 2.6% in 2027. Specifically, the United States rate is expected to decline from 3.6% in 2026 to 2.6% in 2027. Inflation in the euro area is estimated at 3.0% and 2.9% respectively.
Rising energy prices have driven up household expenses and reignited inflationary pressures in many economies, according to the OECD. Additionally, long-term government bond yields have increased as borrowing costs and debt servicing obligations grow. OECD Secretary-General Mathias Cormann remarked that global growth has performed better than anticipated, despite remaining weaker than the previous year. The organization recommends targeted temporary support, sustainable public finances, and enhancing long-term productivity. It also urges governments to invest in skills development, diversify energy sources, and foster wider adoption of artificial intelligence.