The global economy is holding up better than expected in 2026, prompting the Organisation for Economic Co-operation and Development (OECD) to slightly raise its growth forecast. Worldwide GDP is now projected to expand 2.9% this year, up from the 2.8% forecast in June, although that remains below the 3.4% recorded in 2025. A more persistent energy shock is clouding the outlook for 2027, with expected growth cut from 3.1% to 3.0%.
Growth proves resilient
Economic growth moderated during the first half of 2026 but remained stronger than the OECD had anticipated. The organisation monitors economic trends and provides policy analysis and recommendations to governments worldwide. Large oil inventories, additional energy supplies from outside the Gulf and government support helped soften the immediate impact of disruptions on households and businesses.
Investment linked to artificial intelligence provided another source of support. Investment in data centres, semiconductors and related infrastructure supported production and trade across several major economies, even as commodity prices rose and trade uncertainty persisted. Stronger price pressures, weaker real-income growth and elevated interest rates are still expected to restrain activity. Under the OECD’s central scenario, energy prices ease next year, allowing economic momentum to improve during 2027.
Energy risks remain
Persistent disruption to Gulf production and exports could complicate that recovery, particularly as oil inventories that initially cushioned the shock decline. Refining bottlenecks are adding further pressure, while higher energy costs can raise household bills and business expenses and reduce spending elsewhere. G20 headline inflation is forecast to reach 4.1% in 2026 before easing to 3.6% next year. Weather-related food supply disruptions, including a possible strong El Niño event, could add another source of inflation.
Rising long-term government bond yields also threaten to increase borrowing and debt-servicing costs. Policymakers are therefore being urged to keep energy support targeted and temporary. Artificial intelligence presents opportunities and risks of its own. Faster productivity gains could strengthen growth, but disappointing returns from heavy AI investment could trigger financial asset repricing and prompt companies to cut spending.
