PARIS, FRANCE / RankWire.AI / – The OECD has increased its projection for global economic expansion in 2026 to 2.9%, reflecting the economy’s greater-than-anticipated resilience. This revision marks an upgrade from the 2.8% forecast presented in the organization’s June report. Nevertheless, the OECD lowered its outlook for 2027 to 3.0% from 3.1%. Continued robust investment in artificial intelligence contributed to sustaining production, trade, and overall economic activity. Meanwhile, rising energy prices and inflationary pressures persisted as significant challenges for major economies.
According to the September Interim Economic Outlook, global growth experienced a slowdown during the first half of 2026. The annualized growth rate declined to 2.6%, down from 3.6% in the latter half of 2025. Despite this, economic performance in many energy-importing and exporting nations remained unexpectedly strong. Factors such as oil inventories, additional output outside the Gulf region, and alternative supply routes helped mitigate the energy shock. Reduced oil demand from China also played a part in balancing global energy markets.
The OECD highlighted that technology investment continues to serve as a key driver of economic support. Exports of semiconductors surged notably in Korea and Japan, while China also posted stronger technology export figures. Industrial output linked to technological sectors maintained rapid expansion across much of Asia. Similar growth was observed in the United States and various European countries. Consumer confidence improved in advanced economies after May, and unemployment rates stayed low in many regions. However, higher fuel prices continued to impact household purchasing power.
US Economy Gains Strength as Euro Area Remains Cautious
The United States economy is anticipated to grow by 2.2% in 2026 and 2.1% in 2027. Investment related to artificial intelligence is bolstering economic activity, although sluggish consumer spending and slower growth in real income are restricting overall gains. The euro area’s GDP is expected to increase by 1.0% in both years, with higher energy prices and interest rates dampening activity across the region. Japan is projected to grow by 0.8% in 2026, with a slight slowdown to 0.7% in 2027.
China’s economy is forecast to expand 4.5% in 2026 before decelerating to 4.2% in 2027. India is expected to grow 7.1% during the 2026-27 fiscal year, following a 7.8% increase in the previous year. Growth projections for 2027-28 stand at 6.5%. Indonesia is forecasted to grow 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is predicted to expand by 1.5% this year and 1.8% in the following year.
Energy Price Rise Drives G20 Inflation Higher
Inflation remains a primary concern in the OECD outlook. The G20 economies are projected to see headline inflation of 4.1% in 2026, up from 3.4% in 2025, with a subsequent easing to 3.6% in 2027. Inflation in advanced G20 nations is expected to be 3.2% this year and 2.6% next year. Specifically, the United States’ inflation rate is forecast to fall from 3.6% in 2026 to 2.6% in 2027. Euro area inflation is anticipated at 3.0% and 2.9%, respectively.
The OECD noted that rising energy prices have increased household expenses and reignited inflationary pressures across many economies. Additionally, long-term government bond yields have risen as public borrowing costs and debt servicing burdens grow. OECD Secretary-General Mathias Cormann stated that global growth had performed better than expected, 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 for governments to focus on expanding skills, diversifying energy supplies, and promoting wider adoption of artificial intelligence.