The global economy is expected to grow a little faster in 2026 than previously forecast, but the improvement comes with a warning: a more persistent energy shock is now expected to weigh on momentum next year.
The Organisation for Economic Co-operation and Development has raised its projection for worldwide gross domestic product growth in 2026 to 2.9%, from 2.8% in its June outlook. At the same time, it reduced its 2027 forecast to 3.0%, from 3.1%. The revised assessment presents an economy that has proved more resilient than expected so far, while remaining exposed to renewed pressure from energy markets, food prices and financial conditions.
Resilience has relied on energy adjustments and technology investment
In its September interim outlook, the OECD said growth moderated in the first half of 2026 but held up better than it had anticipated. It attributed part of that resilience to sizeable oil inventories, additional energy supply from outside the Gulf and government support measures. These factors helped limit the immediate effect of disruption on households and businesses.
Investment connected to artificial intelligence has also been an important support. Spending on data centres, semiconductors and related infrastructure has lifted production and trade in several major economies, according to the outlook. That investment is one reason the forecast for this year has improved, despite higher commodity prices and uncertainty around trade policy.
The new figures still point to slower expansion than the 3.4% global growth recorded in 2025. The OECD expects stronger price pressures, weaker growth in real incomes and higher interest rates to restrain activity in the near term. Its central case assumes that energy prices ease next year in line with futures-market assumptions, allowing growth to strengthen through 2027.
Energy shock shifts the balance of risks
The organisation’s principal concern is that the energy shock will last longer than initially expected. It said that disruption to production and exports in Gulf economies had intensified, while refining bottlenecks were adding to costs. Oil inventories and other buffers that softened the first impact have declined, leaving less room to absorb a further interruption.
Higher energy prices can filter through the economy in several ways: they raise transport and production costs for businesses, increase household bills and reduce the spending power available for other goods and services. The OECD expects G20 headline inflation to reach 4.1% in 2026 before easing to 3.6% in 2027. That is a forecast, rather than an outcome already confirmed, and it depends on the assumed path for commodities and broader supply conditions.
Food is another vulnerability. The outlook points to weather-related supply shocks, including the possibility of a strong El Niño event, as factors that could push agricultural prices higher. A further deterioration in energy or food markets could produce the difficult combination of weaker growth and more persistent inflation.
Borrowing costs and AI expectations remain key tests
The OECD also highlighted rising long-term government bond yields. Higher yields increase debt-servicing costs for governments and can raise borrowing costs for companies and households. The organisation said fiscal support introduced in response to higher energy prices should be targeted and temporary, rather than broad-based, so that it protects those most exposed while limiting pressure on public finances.
Its outlook does not treat technology investment as an unqualified benefit. Artificial intelligence could lift productivity more quickly than expected, providing an upside for growth. But the spending required is substantial, and a disappointment in expected returns could lead investors to reprice financial assets and companies to curb investment.
For policymakers, the forecast leaves little room for complacency. Central banks must judge whether energy-led inflation remains temporary or is spreading more broadly through prices and wages. Governments face the parallel task of protecting vulnerable households without adding unnecessarily to debt, while investing in energy security, skills and productive capacity.
The revised outlook is therefore neither a declaration that recent shocks have been overcome nor a prediction of an immediate global downturn. It is a measured assessment that the world economy has absorbed disruption better than feared in 2026, but that the margin for error is narrower as it approaches 2027.
