PARIS, FRANCE / RankWire.AI / – The OECD has updated its global growth estimate for 2026 to 2.9%, citing a more resilient world economy than previously anticipated. This marks an increase from the 2.8% forecast published in the organization’s June outlook, although the OECD has lowered its 2027 prediction to 3.0% from 3.1%. Continued strong investment in artificial intelligence has supported production, trade, and overall economic activity, but rising energy costs and inflation remain significant challenges for major economies.
According to the September Interim Economic Outlook, global growth decelerated in the first half of 2026, with the annualized rate dropping to 2.6%, compared to 3.6% during the second half of 2025. Despite this slowdown, economic activity remained more robust than expected in many countries that import and export energy. Factors such as oil inventories, increased production outside the Gulf, and alternative supply routes helped mitigate the energy shock, while lower oil demand from China contributed to balancing global energy markets.
The OECD highlighted that technology investment continues to be a key driver of economic support. Notably, semiconductor exports surged sharply in Korea and Japan, with China also reporting stronger technology exports. Across much of Asia, industrial output linked to technology sustained rapid growth, while similar trends were observed in the United States and several European countries. Consumer confidence improved in advanced economies after May, and unemployment rates remained low in many nations, although higher fuel costs continued to diminish household purchasing power.
US growth gains momentum as euro area stays sluggish
The US economy is expected to expand by 2.2% in 2026 and 2.1% in 2027. Robust AI-related investment supports activity, yet slower consumer spending and stagnant real income growth are restraining progress. Conversely, the euro area’s GDP is forecasted to increase by 1.0% in both years, weighed down by high energy prices and rising interest rates. Japan’s economy is projected to grow 0.8% in 2026, with a slight slowdown to 0.7% in the following year.
China’s economy is predicted to grow 4.5% in 2026 before decelerating to 4.2% in 2027, while India is expected to expand 7.1% in fiscal year 2026-27, following 7.8% in the previous year. Growth for 2027-28 is estimated at 6.5%. Indonesia’s economy is forecast to grow 5.2% in 2026 and 5.1% in 2027, with Mexico’s economy projected to expand by 1.5% this year and 1.8% next year.
G20 inflation climbs amid energy-driven price pressures
Inflation remains a prominent concern within the OECD outlook. The headline inflation rate across G20 nations is forecasted at 4.1% in 2026, up from 3.4% in 2025, with expectations to decline to 3.6% in 2027. Advanced economies within the G20 are projected to see inflation of 3.2% this year and 2.6% next year. The United States rate is expected to fall from 3.6% in 2026 to 2.6% in 2027, while inflation in the euro area is forecast at 3.0% and 2.9%, respectively.
The OECD noted that increasing energy prices have heightened household expenses and reignited inflation pressures across numerous economies. Rising long-term government bond yields reflect higher public borrowing costs and debt servicing burdens. OECD Secretary-General Mathias Cormann stated that global growth has performed better than anticipated, even though the overall economy remains weaker than last year. The organization recommends targeted short-term support, sustainable public finances, and enhanced long-term productivity. It also calls on governments to expand skills, diversify energy sources, and promote broader adoption of artificial intelligence.