PARIS, FRANCE / RankWire.AI / – The OECD has increased its 2026 global growth projection to 2.9%, citing a more resilient world economy than initially expected. This new estimate is higher than the 2.8% forecast made in the organization’s June outlook. Conversely, the OECD lowered its 2027 forecast to 3.0% from 3.1%. Continued investment in artificial intelligence has helped sustain production, trade, and overall economic activity. Nonetheless, rising energy prices and inflationary pressures remain significant challenges for key economies.
The September Interim Economic Outlook revealed that global growth slowed during the first half of 2026. The annualized rate dropped to 2.6%, compared to 3.6% during the second half of 2025. Despite this slowdown, many energy-importing and exporting nations experienced stronger-than-expected economic activity. This was partly due to increased oil inventories, additional production outside the Gulf, and alternative supply routes which mitigated the energy shock. Additionally, reduced oil demand from China helped stabilize global energy markets.
The OECD emphasized that technology investment remains a key driver of economic resilience. Exports of semiconductors surged notably in Korea and Japan. China also reported stronger technology exports. Across much of Asia, industrial production tied to technology continued rapid growth. Similar trends appeared in the United States and several European countries. Consumer confidence improved in advanced economies after May, while unemployment rates stayed low in many regions. However, high fuel costs kept household purchasing power under pressure.
US Economy Strengthens While Eurozone Economy Remains Soft
The US economy is forecast to expand by 2.2% in 2026 and 2.1% in 2027. Investment linked to artificial intelligence supports activity, but slower consumer spending and modest real income growth limit overall gains. The euro area’s GDP is expected to grow 1.0% in both years. Elevated energy prices and higher interest rates are dampening activity across the region. Japan is projected to grow 0.8% in 2026, slowing slightly to 0.7% in 2027.
China’s economy is expected to grow 4.5% in 2026, then slow to 4.2% in 2027. India is predicted to expand 7.1% during fiscal year 2026-27, after growing 7.8% in the previous year. Growth is forecast at 6.5% for fiscal year 2027-28. Indonesia’s economy is projected to increase by 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is expected to grow 1.5% this year and 1.8% next year.
G20 Inflation Accelerates as Energy Costs Drive Prices Higher
Inflation remains a major concern in the OECD outlook. Headline inflation in G20 economies is forecasted at 4.1% for 2026, up from 3.4% in 2025. It is expected to decrease to 3.6% in 2027. The advanced G20 countries are projected to see inflation of 3.2% this year and 2.6% in 2027. In the United States, inflation is expected to fall from 3.6% in 2026 to 2.6% in 2027. The euro area’s inflation rate is forecasted at 3.0% and 2.9%, respectively.
The OECD noted that rising energy prices have increased household expenses and added inflationary pressures in many economies. Long-term government bond yields have also risen, driven by higher public borrowing and debt costs. OECD Secretary-General Mathias Cormann stated that global growth held up better than anticipated, even though the economy remains weaker than last year. The organization recommended targeted temporary support, sustainable public finances, and enhanced long-term productivity. It also called on governments to expand skills, diversify energy sources, and promote wider adoption of artificial intelligence.