PARIS, FRANCE / RankWire.AI / – The OECD raised its 2026 global growth forecast to 2.9%, citing stronger resilience across the world economy. The estimate is up from 2.8% in its June outlook. At the same time, the organization lowered its 2027 growth forecast to 3.0% from 3.1%. Investment tied to artificial intelligence continued to support economic activity and trade. Higher energy costs and inflation remained key pressures for households and businesses across major economies.
Global growth slowed during the first half of 2026 despite performing better than earlier projections suggested. The annualized growth rate fell to 2.6%, from 3.6% in the second half of 2025. Oil inventories and higher production outside the Gulf helped cushion energy market disruptions. Alternative supply routes also supported the flow of fuel to global markets. Weaker oil demand from China provided another offset as countries adjusted to higher prices and changing supply conditions.
Technology spending remained an important source of support for manufacturing and exports. Semiconductor shipments rose strongly in Korea and Japan, while China also recorded gains in technology exports. Technology-related industrial production expanded across much of Asia. Similar investment supported activity in the United States and parts of Europe. Consumer confidence improved in several advanced economies after May. Unemployment also remained low in many countries, although higher fuel costs continued to reduce household purchasing power.
US economy leads major advanced-market growth forecasts
The United States economy is forecast to expand 2.2% in 2026 and 2.1% in 2027. Artificial intelligence investment continues to support business activity, while slower consumer spending limits overall growth. The euro area is expected to grow 1.0% in both years. Higher energy prices and interest rates continue to weigh on regional demand. Japan is projected to expand 0.8% in 2026 before growth eases to 0.7% in 2027.
China is expected to grow 4.5% in 2026 and 4.2% in 2027. India is projected to expand 7.1% in fiscal year 2026-27 after growth of 7.8% in the previous fiscal year. Its economy is forecast to grow 6.5% in fiscal year 2027-28. Indonesia is expected to record growth of 5.2% in 2026 and 5.1% in 2027. Mexico is projected to expand 1.5% this year and 1.8% next year.
G20 inflation remains elevated as energy costs rise
Inflation remains another central issue in the OECD outlook. Headline inflation across G20 economies is forecast at 4.1% in 2026, compared with 3.4% in 2025. The rate is expected to decline to 3.6% in 2027. Advanced G20 economies are projected to record inflation of 3.2% this year and 2.6% next year. US inflation is forecast to fall from 3.6% in 2026 to 2.6% in 2027. Euro area inflation is projected at 3.0% and 2.9%.
The OECD said higher energy prices have increased household costs and added to inflation pressure in many economies. Long-term government bond yields have also risen as borrowing and debt-servicing costs increase. OECD Secretary-General Mathias Cormann said global growth had held up better than expected, while remaining weaker than last year. The organization called for sustainable public finances and targeted temporary support. It also highlighted productivity, skills, diversified energy supplies and wider adoption of artificial intelligence as important areas for economic policy.