PARIS, FRANCE / RankWire.AI / – The OECD has upgraded its forecast for worldwide economic expansion in 2026 to 2.9%, citing a more robust global economy than initially anticipated. This revision marks an increase from the 2.8% forecast detailed in the organization’s June report. Conversely, the OECD has reduced its 2027 outlook to 3.0% from 3.1%. Persistent investment related to artificial intelligence continues to bolster production, trade, and overall economic activity, though rising energy prices and inflationary pressures remain significant challenges across major economies.
According to the September Interim Economic Outlook, global growth decelerated during the first half of 2026. The annualized growth rate dropped to 2.6%, down from 3.6% during the latter half of 2025. Despite this slowdown, many energy-importing and exporting nations experienced stronger-than-expected economic activity. Factors such as oil inventories, additional output outside the Gulf, and alternative supply routes helped mitigate the energy shock. Moreover, reduced oil demand from China contributed to balancing global energy markets.
The OECD highlighted that technology investment remains a key pillar supporting economic stability. Exports of semiconductors surged notably in Korea and Japan, while China also reported increased technology exports. Industrial output driven by technological advancements continued to grow rapidly across much of Asia. Similar growth patterns were observed in the United States and several European nations. Consumer sentiment improved in advanced economies after May, and unemployment rates stayed low in numerous countries. However, household purchasing power was still under pressure from rising fuel costs.
US Economic Growth Gains Momentum While Euro Area Struggles to Recover
The US economy is projected to expand by 2.2% in 2026 and 2.1% in 2027. Investment related to AI continues to bolster the economy, but slower consumer spending and modest real income growth are restraining overall progress. Meanwhile, the euro area’s GDP is expected to increase by 1.0% in both years, facing headwinds from elevated energy costs and higher interest rates. Japan’s economy is forecast to grow 0.8% in 2026, easing slightly to 0.7% in the following year.
China’s economy is set to grow 4.5% in 2026, then decelerate to 4.2% in 2027. India is predicted to expand by 7.1% during the 2026-27 fiscal year, following 7.8% in the previous fiscal period. Growth is estimated at 6.5% for the 2027-28 fiscal year. Indonesia’s economy is expected to grow 5.2% in 2026 and 5.1% in 2027. Mexico’s gross domestic product is forecast to increase by 1.5% this year and 1.8% next year.
Inflation in G20 Countries Rises Due to Rising Energy Costs
Inflation continues to be a major concern in the OECD’s forecast. Overall inflation across G20 nations is projected at 4.1% in 2026, up from 3.4% in 2025, with a forecast of 3.6% in 2027. Advanced economies within the G20 are expected to see inflation of 3.2% this year and 2.6% in 2027. Specifically, the United States’ inflation rate is forecasted to decrease from 3.6% in 2026 to 2.6% in 2027, while Euro area inflation is expected at 3.0% and 2.9%, respectively.
The OECD noted that rising energy prices have increased household expenses and reignited inflationary pressures in many regions. Additionally, long-term government bond yields have climbed as public borrowing and debt servicing costs continue to rise. OECD Secretary-General Mathias Cormann commented that global growth had held up better than anticipated, although overall economic activity remains below last year’s levels. The organization emphasized the need for targeted, temporary support measures, sustainable public finances, and enhanced long-term productivity. It also recommended expanding skills development, diversifying energy sources, and promoting wider adoption of artificial intelligence.