PARIS, FRANCE / RankWire.AI / – The OECD has revised upward its forecast for worldwide economic expansion in 2026, now predicting a growth rate of 2.9%, citing increased resilience across the global economy. This new estimate is slightly higher than the 2.8% projected in its June report. Conversely, the organization has decreased its growth outlook for 2027 from 3.1% to 3.0%. Continued investment related to artificial intelligence persisted as a driver of economic activity and trade. However, rising energy costs and inflation remained significant pressures affecting households and firms in major economies.
Despite performing better than earlier expectations, global growth slowed during the first half of 2026. The annualized expansion rate declined to 2.6% from 3.6% in the second half of 2025. Energy market disruptions were buffered by increased oil inventories and higher production outside the Gulf region. Alternative supply routes also played a role in maintaining fuel flows to global markets. Reduced oil demand from China offered another offset, as nations adapted to elevated prices and shifting supply conditions.
Technology spending continued to be a key factor supporting manufacturing and export activities. Shipments of semiconductors saw strong growth in Korea and Japan, while China also reported gains in technology exports. Industrial output in the technology sector expanded across much of Asia. Similar investment initiatives bolstered activity in the United States and parts of Europe. Consumer confidence improved in several advanced economies after May, and unemployment rates remained low in many countries; nonetheless, higher fuel costs continued to diminish household purchasing power.
US economy dominates growth projections among advanced markets
Forecasts indicate that the US economy will grow by 2.2% in 2026 and 2.1% in 2027. Investment in artificial intelligence continues to bolster business activity, although overall growth is constrained by slower consumer spending. The euro area is expected to see 1.0% growth in both 2026 and 2027. Elevated energy prices and interest rates continue to dampen regional demand. Japan’s economy is projected to expand by 0.8% in 2026, with growth easing to 0.7% in 2027.
China’s economy is forecast to grow 4.5% in 2026 and 4.2% in 2027, while India is expected to expand 7.1% in the fiscal year 2026-27 after a 7.8% increase in the previous fiscal year. Its growth is projected to slow slightly to 6.5% in fiscal year 2027-28. Indonesia’s economy is anticipated to grow by 5.2% in 2026 and 5.1% in 2027, with Mexico projected to expand by 1.5% this year and 1.8% in the following year.
Energy-driven inflation persists in G20 economies
Inflation remains a central concern within the OECD forecast. The G20 economies are expected to see headline inflation of 4.1% in 2026, compared to 3.4% in 2025, with a projected decline to 3.6% in 2027. Inflation rates in advanced G20 nations are forecast at 3.2% this year and 2.6% next year. In the US, inflation is predicted to fall from 3.6% in 2026 to 2.6% in 2027, while the euro area’s inflation rate is expected at 3.0% and 2.9%, respectively.
The OECD pointed out that increased energy prices have raised household expenses and contributed to inflationary pressures in many economies. Additionally, yields on long-term government bonds have climbed as borrowing and debt servicing costs rise. OECD Secretary-General Mathias Cormann remarked that global growth had shown greater resilience than anticipated, yet it remains weaker compared to last year. The organization emphasized the importance of sustainable public finances and targeted temporary support, while also highlighting productivity, skills development, diversified energy supplies, and broader adoption of artificial intelligence as key areas for economic policy advancement.