PARIS, FRANCE / RankWire.AI / – The OECD has upgraded its forecast for worldwide growth in 2026 to 2.9%, citing increased resilience across the global economy. This estimate marks an increase from 2.8% in its June outlook. Simultaneously, the organization has lowered its projection for 2027 growth to 3.0% from 3.1%. Investment related to artificial intelligence continues to bolster economic activity and international trade. Meanwhile, rising energy prices and inflation remain significant challenges for households and businesses in major economies.
Despite performing better than earlier projections, global growth slowed in the first half of 2026. The annualized growth rate dropped to 2.6%, down from 3.6% during the second half of 2025. Oil inventories and increased production outside the Gulf helped mitigate disruptions in energy markets. Alternative supply routes also supported the movement of fuel globally. Reduced oil demand from China provided another offset as countries adjusted to higher prices and evolving supply conditions.
Technology expenditure remained a key driver supporting manufacturing and exports. Shipments of semiconductors saw substantial growth in Korea and Japan, while China also experienced gains in technology exports. Industrial production related to technology expanded across much of Asia. Similar investments fueled activity in the United States and certain European countries. Consumer confidence in several advanced economies improved after May, and unemployment remained relatively low in many nations, although household purchasing power was still affected by higher fuel costs.
US Economy Drives Major Growth Forecasts in Advanced Markets
The US economy is anticipated to grow by 2.2% in 2026 and 2.1% in 2027. Continued investment in artificial intelligence supports business activity, though overall growth is limited by slower consumer spending. The euro area is expected to see 1.0% expansion in both years. Elevated energy prices and interest rates continue to dampen regional demand. Japan is projected to expand by 0.8% in 2026, with growth easing to 0.7% in 2027.
China’s growth rate is forecast at 4.5% for 2026 and 4.2% for 2027. India is projected to expand by 7.1% in the 2026-27 fiscal year after achieving 7.8% growth in the previous year. Its economy is expected to grow 6.5% in the 2027-28 fiscal year. Indonesia is forecasted to record growth of 5.2% in 2026 and 5.1% in 2027. Mexico’s economy is expected to grow 1.5% this year and 1.8% in the following year.
G20 Inflation Remains Elevated with Rising Energy Costs
Inflation remains a key concern in the OECD outlook. The forecast for headline inflation across G20 economies is 4.1% in 2026, up from 3.4% in 2025. It is expected to decline to 3.6% in 2027. Advanced G20 economies are projected to experience inflation rates of 3.2% in this year and 2.6% in 2027. US inflation is forecast to fall from 3.6% in 2026 to 2.6% in 2027, while euro area inflation is expected at 3.0% and 2.9% respectively.
The OECD noted that higher energy prices have increased household expenses and added inflationary pressures in numerous economies. Rising long-term government bond yields reflect increased borrowing and debt-servicing costs. OECD Secretary-General Mathias Cormann stated that global growth has held up better than anticipated, though it remains weaker than 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 the broader adoption of artificial intelligence as critical areas for economic policy improvement.