OECD Lifts Its 2026 Global Growth Forecast to 2.9 Percent and Trims 2027 to 3.0 Percent
The OECD raised its forecast for global growth this year to 2.9 percent, 0.1 point above its June projection, and cut next year to 3.0 percent, 0.1 point below it, in the Interim Economic Outlook published on Wednesday under the title Weathering Successive Shocks. Global output grew 3.4 percent in 2025, so both projection years sit below last year’s outturn.
Growth already slowed in the first half
World growth ran at an annualised 2.6 percent in the first half of 2026, against 3.6 percent in the second half of 2025. Among the G20, the largest downgrade for this year falls on Saudi Arabia, on our calculation, where output is now projected to contract 1.8 percent in 2026, 5.0 points weaker than the June projection, before growing 4.1 percent in 2027. The largest upgrade, on our calculation, is Korea at 3.7 percent, 1.1 points higher, followed by India at 7.1 percent, 0.8 points higher. The United States is put at 2.2 percent this year and 2.1 percent next, both revised up, and China at 4.5 percent and 4.2 percent. The report ties part of that resilience to spending on artificial intelligence, with investment in data centre structures and technology equipment lifting second quarter growth in the United States, Canada and Australia, and technology exports rising in Korea and Japan.
| Economy | 2026, change from June | 2027, change from June |
|---|---|---|
| World | 2.9%, +0.1 | 3.0%, -0.1 |
| G20 | 3.1%, +0.1 | 3.0%, 0.0 |
| United States | 2.2%, +0.2 | 2.1%, +0.3 |
| Euro area | 1.0%, +0.2 | 1.0%, -0.2 |
| Japan | 0.8%, +0.2 | 0.7%, -0.1 |
| China | 4.5%, 0.0 | 4.2%, -0.1 |
| India | 7.1%, +0.8 | 6.5%, +0.1 |
| Korea | 3.7%, +1.1 | 2.6%, +0.7 |
| Saudi Arabia | -1.8%, -5.0 | 4.1%, -0.2 |
| Turkiye | 2.7%, -0.4 | 3.6%, -0.2 |
OECD Economic Outlook, Interim Report September 2026, Table 1, based on data available up to 16 September 2026. India is on fiscal years starting in April.
The interim report projects the G20 economies, the OECD, the euro area and the world, so the Gulf appears only through Saudi Arabia, a G20 member, and as an unnamed group of energy exporters in the text. Egypt, Kuwait and the United Arab Emirates carry no projection in it.
Inflation is going the other way
G20 headline inflation is projected to rise from 3.4 percent in 2025 to 4.1 percent in 2026, before easing to 3.6 percent in 2027, while core inflation in the advanced economies moderates from 2.7 percent in 2026 to 2.5 percent in 2027. The sharper revision is in the later year: the 2026 headline figure is 0.1 point above the June projection, the 2027 figure 0.5 points above it. More than half of G20 countries now have inflation above their central bank target, and about one third of a sample of 37 central banks with data to August 2026 have raised policy rates since March. Energy assumptions drive much of the profile: Brent is assumed to peak at a quarterly average of 105 dollars a barrel in the fourth quarter of 2026 and to average 85 dollars in 2027, with European gas at 82 euros a megawatt hour at the peak and 60 euros in 2027. The International Energy Agency estimates that observed oil inventories in August were 507 million barrels below February, a fall of just over 6 percent, and the United States strategic reserve is at its lowest since 1982.
The downside is quantified
The OECD prices its main risk rather than describing it. Its illustrative scenario combines several shocks from the fourth quarter of 2026: oil and gas prices hold at current levels through 2027, leaving oil about 24 percent and gas about 31 percent above the baseline; energy shortages cut technical efficiency by 1.5 percent in the most exposed economies and about 0.75 percent elsewhere; food prices run 10 percent above the baseline; equity prices fall 15 percent; investment risk premia rise 35 basis points and the term premium on long dated government bonds 25 basis points; and policy rates rise by about 1 point in most economies as the model responds. Together those shocks leave global growth 0.7 points lower in 2027 and global inflation 1.1 points higher. A 10 percent fall in oil and gas prices from the fourth quarter of 2026 would instead add 0.1 point to growth and take 0.3 points off inflation. The weather is in the same section: the OECD, citing the National Oceanic and Atmospheric Administration, puts the probability of a very strong El Nino event in the October to December period at 95 percent, and the baseline assumes food commodity prices peak in the second quarter of 2027 about 11 percent above the third quarter of 2026.
Why it matters: “Growth is weaker than last year and inflation is rising again,” said Mathias Cormann, the OECD Secretary General. For the Gulf the tariff and energy assumptions cut both ways, because the same higher oil path that supports revenue is what the OECD treats as the main drag on world demand, and Saudi Arabia is projected to return to growth of 4.1 percent in 2027 after a contraction this year.
Outlook: the effective tariff rate on United States imports rose from 9.6 percent in June to 10.9 percent by mid September, and the projections assume it stays at that level through 2027, so any further move changes the arithmetic. The next full Economic Outlook is where these interim projections are revisited.
Sources: OECD, International Energy Agency, National Oceanic and Atmospheric Administration.
