PARIS, FRANCE / RankWire.AI / – The OECD has increased its projection for worldwide growth in 2026 to 2.9%, citing greater economic resilience than initially anticipated. This revision marks an upward move from the 2.8% forecast made in the organization’s June report. Conversely, the OECD revised downward its 2027 outlook to 3.0% from 3.1%. Continued investment in artificial intelligence played a significant role in supporting production, trade, and overall economic activity. Nevertheless, rising energy costs and persistent inflationary pressures remained key challenges for major economies.
The September Interim Economic Outlook revealed that global expansion slowed during the first half of 2026. The annualized growth rate dropped to 2.6%, compared to 3.6% in the second half of 2025. Despite this slowdown, economic performance in many energy-importing and exporting nations exceeded expectations. 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 major pillar of economic support. Exports of semiconductors surged notably in Korea and Japan, with China also reporting stronger technology exports. Industrial output driven by technological advances maintained rapid growth across much of Asia. Similar trends emerged in the United States and several European countries. Consumer sentiment improved in advanced economies after May, while unemployment rates remained low in numerous nations. However, escalating fuel costs persisted in pressuring household purchasing power.
US Economy Gains Momentum While Euro Area Remains Weak
The United States economy is forecast to expand by 2.2% in 2026 and 2.1% in 2027. Robust investment in artificial intelligence supports economic activity, although slower consumer spending and subdued real income growth limit overall gains. In the euro area, GDP is projected to grow by 1.0% in both 2026 and 2027. Elevated energy prices and higher interest rates are dampening economic activity across the region. Japan is expected to see a growth of 0.8% in 2026, slowing slightly to 0.7% in the following year.
China’s economy is anticipated to grow by 4.5% in 2026, before easing to 4.2% in 2027. India is expected to achieve 7.1% growth in the 2026-27 fiscal year, following 7.8% in the previous year, with a forecast of 6.5% in 2027-28. Indonesia’s economy should expand 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is projected to increase by 1.5% this year and 1.8% next year.
Energy Costs Drive Inflation Higher Across G20 Countries
Inflation continues to pose a central challenge according to the OECD outlook. The headline inflation rate across G20 nations is expected to reach 4.1% in 2026, up from 3.4% in 2025, with a projected decrease to 3.6% in 2027. Advanced economies within the G20 are forecast to see inflation of 3.2% this year and 2.6% next year. Specifically, the United States rate is expected to decline from 3.6% in 2026 to 2.6% in 2027, while Euro area inflation is estimated at 3.0% and 2.9%, respectively.
Rising energy prices have increased household expenses and reignited inflationary pressures in numerous economies. Additionally, long-term government bond yields have risen as public borrowing and debt servicing costs grow. OECD Secretary-General Mathias Cormann noted that global growth has performed better than initially expected, although the economy remains weaker than last year. The organization recommends targeted temporary support, sustainable public finances, and efforts to boost long-term productivity. It also urges governments to expand skills, diversify energy supplies, and promote broader adoption of artificial intelligence.