PARIS, FRANCE / RankWire.AI / – OECD has revised its projection for global economic expansion in 2026, raising it to 2.9% due to the economy’s unexpectedly strong performance. This upward revision increases the previous estimate of 2.8% from the organization’s June report. Nevertheless, the OECD adjusted its outlook for 2027 downward to 3.0% from 3.1%. Continued robust investments linked to artificial intelligence are contributing to ongoing support for production, trade, and overall economic activity, even as elevated energy prices and inflationary pressures persist across major economies.
According to the September Interim Economic Outlook, global growth experienced a slowdown during the first half of 2026, with the annualized rate dropping to 2.6% from 3.6% in the second half of 2025. Despite this deceleration, economic activity in many energy-importing and exporting nations remained stronger than anticipated. Factors such as oil inventories, additional production outside the Gulf, and alternative supply routes have helped mitigate the energy shock, while reduced oil demand from China has contributed to stabilizing global energy markets.
The OECD highlighted that technology investments continue to serve as a significant pillar supporting economic growth. Export figures for semiconductors surged notably in Korea and Japan, with China also recording increased technology exports. The expansion of industrial production related to technology remained rapid across much of Asia, with similar growth observed in the United States and various European nations. Consumer confidence improved in advanced economies after May, and unemployment rates stayed low in many countries; however, rising fuel costs continued to put pressure on household purchasing power.
US Economy Gains Momentum While Euro Area Remains Lackluster
Forecasts indicate that the United States will see a 2.2% growth rate in 2026 and 2.1% in 2027, with strong artificial intelligence-related investments bolstering activity despite slower consumer spending and limited real income growth. Meanwhile, the euro area’s gross domestic product is expected to increase by 1.0% in both years, with high energy prices and rising interest rates dampening economic momentum across the region. Japan’s economy is projected to expand by 0.8% in 2026 before decelerating slightly to 0.7% in 2027.
China’s economy is estimated to grow by 4.5% in 2026, then slow to 4.2% in 2027. India is forecasted to expand by 7.1% in fiscal year 2026-27, following 7.8% growth in the previous fiscal year. Growth in India is expected to be 6.5% during fiscal year 2027-28. Indonesia’s economy is projected to grow 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is forecast to increase by 1.5% this year and 1.8% next year.
Inflation Rises in G20 Countries Due to Escalating Energy Costs
Inflation remains a key concern within the OECD outlook, with overall inflation across G20 economies projected at 4.1% in 2026, increasing from 3.4% in 2025, and expected to decline to 3.6% in 2027. Advanced G20 nations are anticipated to record inflation rates of 3.2% in 2026 and 2.6% in 2027, with the United States expected to see a decrease from 3.6% in 2026 to 2.6% in 2027. The euro area’s inflation rate is forecasted at 3.0% and 2.9%, respectively. Rising energy prices have heightened household expenses and reignited inflationary pressures in many economies, while long-term government bond yields have also increased as public borrowing and debt servicing costs rise. OECD Secretary-General Mathias Cormann emphasized that global growth has remained better than initially expected, though the economy still shows signs of weakening compared to last year. The organization recommended targeted temporary support, sustainable public finances, and a focus on enhancing long-term productivity, alongside calls for governments to expand skills, diversify energy sources, and promote wider adoption of artificial intelligence.