PARIS, FRANCE / RankWire.AI / – The OECD has increased its projection for worldwide expansion in 2026 to 2.9%, citing the global economy’s unexpectedly robust performance. This upward revision is from the 2.8% figure presented in the organization’s June outlook. Nevertheless, the OECD has lowered its forecast for 2027 to 3.0% from 3.1%, reflecting cautious optimism. Continued investment in artificial intelligence fueled growth across sectors, supporting production, trade, and overall economic activity, despite persistent pressures from rising energy costs and inflation across major economies.
According to the September Interim Economic Outlook, global growth experienced a slowdown in the first half of 2026, with an annualized rate dropping to 2.6% from 3.6% during the second half of 2025. Despite this deceleration, many energy-importing and exporting nations maintained stronger-than-expected economic activity, aided by ample oil inventories, additional output outside the Gulf region, and alternative supply routes that helped mitigate energy shocks. Furthermore, decreased oil demand from China contributed to balancing the global energy markets.
The OECD emphasized that technology investments continued to be a key factor supporting economic stability. Exports of semiconductors surged notably in Korea and Japan, while China also showed increased technology export figures. Rapid growth in industrial production linked to technology persisted across much of Asia, with similar trends observed in the United States and several European nations. Consumer confidence saw improvement in advanced economies after May, and unemployment rates remained low in many regions, yet rising fuel prices persisted as a challenge to household purchasing power.
US Economy Gains Momentum; Eurozone Remains Weak
The forecast indicates that the United States will expand by 2.2% in 2026 and 2.1% in 2027, supported by strong artificial intelligence investments, though growth is tempered by sluggish consumer expenditure and modest real income increases. Meanwhile, the euro area’s gross domestic product is expected to grow by 1.0% in both years, with higher energy prices and interest rates exerting downward pressure on activity across the region. Japan’s economy is projected to grow 0.8% in 2026, easing to 0.7% in 2027.
China’s economy is forecasted to expand by 4.5% in 2026, slowing slightly 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 prior fiscal year, with a projection of 6.5% for 2027-28. Indonesia’s growth is anticipated at 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is forecast to rise by 1.5% this year and 1.8% in the following year.
Inflation Rises in G20 Countries Due to Energy Cost Pressures
Inflation remains a primary concern within the OECD outlook, with headline inflation across G20 nations projected at 4.1% in 2026, an increase from 3.4% in 2025. The inflation rate is expected to decline slightly to 3.6% in 2027. In the advanced G20 economies, inflation is forecast at 3.2% this year and 2.6% next year, with the United States seeing a decrease from 3.6% to 2.6%. The euro area’s inflation is estimated at 3.0% and 2.9%, respectively.
The OECD pointed out that rising energy prices have elevated household expenses and revived inflationary pressures in numerous economies. Additionally, long-term government bond yields have climbed as public borrowing costs and debt servicing expenses increase. OECD Secretary-General Mathias Cormann highlighted that global growth has performed better than expected, though the economy remains weaker compared to last year. The organization recommended targeted, temporary financial support, sustainable public finance strategies, and improvements in long-term productivity. It also called for governments to expand workforce skills, diversify energy sources, and promote wider adoption of artificial intelligence.