PARIS, FRANCE / RankWire.AI / – The OECD has increased its forecast for global expansion in 2026 to 2.9%, citing the world economy’s stronger-than-anticipated resilience. This marks an upward revision from the 2.8% estimate provided in the organization’s June outlook. Nonetheless, the OECD has lowered its 2027 growth forecast slightly, from 3.1% to 3.0%. Ongoing investment in artificial intelligence continues to bolster production, trade, and overall economic activity. Meanwhile, escalating energy prices and inflation remain significant pressures across major economies.
The September Interim Economic Outlook indicated that global growth decelerated during the first half of 2026. The annualized rate dropped to 2.6%, compared to 3.6% during the latter half of 2025. In many energy-importing and exporting nations, economic activity proved to be more robust than initially projected. Factors such as increased oil inventories, additional production outside the Gulf region, and alternative supply routes contributed to mitigating the energy shock. Additionally, reduced oil demand from China helped stabilize global energy markets.
According to the OECD, technology investment continues to serve as a key driver of economic support. The exports of semiconductors surged notably in Korea and Japan, while China also posted stronger technology exports. Industrial production related to technology maintained rapid growth throughout much of Asia. Similar developments were seen in the United States and several European countries. Consumer confidence saw improvement in advanced economies after May, while unemployment rates remained low in many regions. However, household purchasing power was still under pressure due to higher fuel costs.
US economy accelerates while euro area remains sluggish
Forecasts indicate that the United States will expand by 2.2% in 2026 and 2.1% in 2027. Robust AI-related investments underpin activity, but slower consumer spending and weaker growth in real income limit overall gains. The euro area’s GDP is expected to increase by 1.0% in both years. Elevated energy prices and interest rates are dampening economic performance across the region. Japan’s economy is projected to grow 0.8% in 2026 before a slight slowdown to 0.7% in 2027.
China’s economy is forecasted to grow 4.5% in 2026, then slow to 4.2% in 2027. India is expected to expand 7.1% during the 2026-27 fiscal year, following 7.8% in the previous year. Growth in India is projected at 6.5% for the 2027-28 fiscal year. Indonesia’s economy is anticipated to grow 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is expected to increase by 1.5% this year and 1.8% next year.
G20 inflation rises as energy costs exert upward pressure
Inflation remains a primary concern in the OECD outlook. The headline inflation rate across G20 nations is projected at 4.1% in 2026, an increase from 3.4% in 2025. It is expected to decline to 3.6% in 2027. Advanced G20 economies are forecast to experience inflation of 3.2% this year and 2.6% next year. The United States rate is predicted to fall from 3.6% in 2026 to 2.6% in 2027. Inflation in the euro area is expected to be 3.0% and 2.9%, respectively.
The OECD highlighted that rising energy prices have contributed to higher household costs and renewed inflationary pressures in many economies. Long-term government bond yields have also increased as public borrowing and debt service costs go up. OECD Secretary-General Mathias Cormann stated that global growth had performed better than anticipated, although economic activity remains weaker than last year. The organization called for targeted temporary support measures, sustainable public finances, and stronger long-term productivity. It also emphasized the importance of expanding skills, diversifying energy supplies, and fostering wider adoption of artificial intelligence.