PARIS, FRANCE / RankWire.AI / – The OECD has upgraded its forecast for worldwide economic expansion in 2026 to 2.9%, citing increased resilience across the global economy. This projection has been raised from 2.8% in its June outlook. Simultaneously, the organization adjusted downward its growth outlook for 2027 to 3.0% from 3.1%. Continued investment related to artificial intelligence has persisted as a key driver supporting economic activity and trade, while rising energy prices and inflationary pressures remain significant challenges for households and businesses across major economies.
During the first half of 2026, global growth experienced a slowdown, though it outperformed earlier expectations. The annualized growth rate decreased to 2.6% from 3.6% in the latter half of 2025. Inventory levels of oil and higher production outside the Gulf region played roles in mitigating disruptions in energy markets. Additionally, alternative supply routes helped maintain fuel flow to global markets. Reduced oil demand from China contributed to this offset, as countries adjusted to higher prices and evolving supply conditions.
Technology spending continued to be a vital support for manufacturing and exports. Semiconductor exports saw robust growth in Korea and Japan, while China also reported gains in technology-related shipments. Industrial production in the technology sector expanded across much of Asia. Similar investments supported economic activity in the United States and parts of Europe. Consumer confidence improved in several advanced economies after May. Many countries also maintained low unemployment rates, though higher fuel costs continued to reduce household purchasing power.
US Economy Outperforms in Growth Forecasts for Major Advanced Markets
The US economy is expected to grow by 2.2% in 2026 and 2.1% in 2027. Investment in artificial intelligence continues to bolster business activities, although slower consumer spending restricts overall growth. The euro area is forecast to expand 1.0% in both years. Elevated energy prices and interest rates persistently impact regional demand. Japan’s economy is projected to grow 0.8% in 2026, with growth easing to 0.7% in 2027.
China’s economy is forecasted to grow 4.5% in 2026 and 4.2% in 2027. India is projected to expand 7.1% in the fiscal year 2026-27 after a 7.8% increase in the previous year, with growth expected to be 6.5% in fiscal year 2027-28. Indonesia is forecasted to achieve 5.2% growth in 2026 and 5.1% in 2027. Mexico’s economy is expected to grow 1.5% this year and 1.8% next year.
Inflation in G20 Countries Remains High as Energy Prices Continue to Rise
Inflation remains a central concern in the OECD forecast. Overall inflation across G20 nations is projected at 4.1% for 2026, up from 3.4% in 2025. It is anticipated to decline slightly to 3.6% in 2027. Advanced economies within the G20 are expected to see inflation rates of 3.2% this year and 2.6% next year. US inflation is forecast to decrease from 3.6% in 2026 to 2.6% in 2027, while inflation in the euro area is projected at 3.0% and 2.9%, respectively.
According to the OECD, rising energy prices have increased household expenses and added inflationary pressures in many economies. Additionally, long-term government bond yields have climbed as borrowing and debt-servicing costs rise. OECD Secretary-General Mathias Cormann stated that global growth has been more resilient than expected but remains weaker than last year. The organization emphasized the importance of sustainable public finances and targeted temporary support, highlighting areas such as productivity, skills development, diversified energy sources, and broader adoption of artificial intelligence for economic policy.