PARIS, FRANCE / RankWire.AI / – The OECD has upgraded its forecast for global economic expansion in 2026 to 2.9%, reflecting a more resilient world economy than initially anticipated. This revision marks an increase from the previous 2.8% predicted in the organization’s June report. Nonetheless, the OECD has adjusted its 2027 outlook downward, lowering it from 3.1% to 3.0%. Ongoing robust investments in artificial intelligence have continued to bolster production, trade, and overall economic activity. Meanwhile, rising energy costs and inflationary pressures persist as significant challenges across major economies.
The September Interim Economic Outlook indicated a slowdown in global growth during the first half of 2026. The annualized growth rate decreased to 2.6%, compared to 3.6% in the latter half of 2025. Despite this deceleration, many countries that import and export energy experienced stronger-than-expected economic activity. Factors such as increased oil inventories, additional production outside the Gulf region, and alternative supply routes helped mitigate the energy shock. Additionally, diminished oil demand from China contributed to balancing global energy markets.
According to the OECD, technology investment remains a vital driver of economic resilience. Exports of semiconductors surged notably in Korea and Japan, while China also saw an uptick in technology exports. Industrial output associated with technological advancements sustained rapid growth throughout much of Asia. Similar growth patterns emerged in the United States and several European nations. Consumer sentiment improved in advanced economies after May, and unemployment rates stayed low in many regions. However, elevated fuel prices continued to exert downward pressure on household purchasing power.
US Economy Gains Strength, While Euro Area Faces Persistent Challenges
The US economy is anticipated to expand by 2.2% in 2026 and 2.1% in 2027. Investment related to artificial intelligence is supporting activity, although slower consumer spending and weaker real income growth are constraining overall gains. The euro area’s GDP is expected to grow by 1.0% in both years, hampered by higher energy prices and interest rates that dampen economic momentum. Japan’s growth forecast stands at 0.8% in 2026, with a slight slowdown to 0.7% in 2027.
China’s economy is projected to expand by 4.5% in 2026 before easing to 4.2% in 2027. India is forecast to grow 7.1% in the fiscal year 2026-27, after recording 7.8% growth in the previous year. Growth is expected at 6.5% for the fiscal year 2027-28. Indonesia’s economy is set to increase by 5.2% in 2026 and 5.1% in 2027. Mexico’s economic growth is forecast at 1.5% this year and 1.8% in the following year.
G20 Faces Rising Inflation Driven by Energy Price Pressures
Inflation remains a key concern in the OECD forecast. Overall inflation across G20 nations is projected at 4.1% in 2026, up from 3.4% in 2025. It is expected to decline to 3.6% in 2027. Advanced G20 economies are predicted to see inflation of 3.2% this year and 2.6% in 2027. The United States’ inflation rate is forecast to decrease from 3.6% in 2026 to 2.6% in 2027. Euro area inflation is estimated at 3.0% and 2.9% for the respective years.
The OECD notes that rising energy prices have contributed to increased household expenses and renewed inflationary pressures in many regions. Long-term government bond yields have also climbed, reflecting higher public borrowing costs and debt service payments. OECD Secretary-General Mathias Cormann highlighted that global growth has been more resilient than expected, although the economy remains weaker compared to last year. The organization advocates for targeted, temporary support measures, sustainable public finances, and boosting long-term productivity. It also recommends expanding skills, diversifying energy sources, and promoting broader adoption of artificial intelligence.