PARIS, FRANCE / RankWire.AI / – OECD has revised its 2026 global growth prediction upward to 2.9%, reflecting a more robust world economy than previously anticipated. The new estimate surpasses the 2.8% projection made in the organization’s June report. Conversely, the forecast for 2027 has been lowered slightly to 3.0% from 3.1%. Ongoing investment in artificial intelligence continues to bolster production, trade, and economic activity worldwide. Nonetheless, elevated energy costs and inflationary pressures persist as significant concerns across major economies.
During the September Interim Economic Outlook, the OECD observed a slowdown in global growth during the first half of 2026. The annualized growth rate declined to 2.6%, compared to 3.6% in the latter half of 2025. Despite this slowdown, economic activity in many energy-importing and energy-exporting nations remained stronger than initially expected. Factors such as oil inventories, increased production outside the Gulf, and alternative supply routes helped mitigate the energy shock. Additionally, reduced oil demand from China contributed to balancing global energy markets.
The OECD highlighted that technology investment continues to serve as a vital source of economic support. Exports of semiconductors surged notably in Korea and Japan, while China also experienced an uptick in technology exports. Industrial output linked to technology sustained rapid growth across much of Asia. Similar positive trends were observed in the United States and various European nations. Consumer confidence improved in advanced economies after May, and unemployment rates remained low in numerous countries. However, household purchasing power was still under pressure due to higher fuel prices.
US Economic Growth Gains Momentum While Eurozone Remains Weak
Forecasts suggest that the United States will expand by 2.2% in 2026 and 2.1% in 2027. Investment related to artificial intelligence is supporting growth, but subdued consumer spending and sluggish real income growth are restraining progress. Meanwhile, GDP in the euro area is expected to increase by 1.0% in both years. Elevated energy prices and higher interest rates continue to dampen activity throughout the region. Japan is predicted to grow by 0.8% in 2026, easing slightly to 0.7% next year.
China’s economy is projected to grow by 4.5% in 2026, slowing to 4.2% in 2027. India is expected to expand by 7.1% during the 2026-27 fiscal year, following 7.8% in the previous fiscal year. Growth for 2027-28 is forecasted at 6.5%. Indonesia is expected to see a 5.2% increase in 2026 and 5.1% in 2027. Mexico’s economy is predicted to grow by 1.5% this year and 1.8% in the following year.
Inflation in G20 Economies Rises as Energy Costs Dominate Price Movements
Inflation continues to be a key challenge according to the OECD outlook. The headline inflation rate across G20 countries is projected at 4.1% in 2026, up from 3.4% in 2025. It is expected to decrease slightly to 3.6% in 2027. Advanced G20 economies are forecasted to see inflation of 3.2% this year and 2.6% next year. In the United States, inflation is projected to fall from 3.6% in 2026 to 2.6% in 2027. Euro area inflation is estimated at 3.0% and 2.9%, respectively.
The OECD pointed out that rising energy prices have driven up household expenses and renewed inflationary pressures in numerous economies. Additionally, long-term government bond yields have increased as public borrowing costs and debt servicing expenses climb. OECD Secretary-General Mathias Cormann stated that global growth has held up better than anticipated, although the economy remains weaker than last year. The organization recommended targeted short-term support, sustainable public finances, and efforts to boost long-term productivity. It also called on governments to enhance skills, diversify energy sources, and promote wider adoption of artificial intelligence.