OECD Raises 2026 Growth to 2.9% Despite Energy Risks
AI investment supports global resilience in 2026, but Middle East energy shocks threaten 2027 outlook and inflation targets.
Key points
- OECD expects global growth of 2.9% in 2026, slightly above the previous 2.8% forecast.
- AI investment in the US, Japan, and South Korea provides key economic resilience.
- Rising energy prices could reduce global growth by 0.7 percentage points in 2027.
The global economy is expected to grow by 2.9% in 2026, according to the OECD. This figure is slightly higher than the previous forecast of 2.8%. The improvement is largely driven by strong artificial intelligence investment.
However, the outlook for 2027 has been weakened. Rising energy prices from the Middle East conflict are creating new risks. These pressures could reduce global growth and increase inflation costs for households and businesses.
AI Investment Supports Economic Resilience
Heavy spending on data centers and semiconductors is supporting activity in the United States. It is also boosting technology exports from Japan and South Korea. According to Modern Diplomacy, this sector remains a key source of economic strength.
This support may not be enough to offset broader pressures. If the energy shock becomes more severe, it could undermine these gains. The balance between technology growth and energy costs is critical.
Energy Shock Raises Inflation Risks
Inflation across G20 economies is expected to average 4.1% in 2026. The OECD raised its 2027 inflation forecast to 3.6% from 3.1%. Higher energy prices are complicating decisions for central banks on interest rates.
Europe faces particular challenges due to higher natural gas prices. Eurozone inflation is projected at 3.0% in 2026. Gas storage levels are at their lowest point in 15 years heading into winter.
Major Economies Face Different Pressures
The US economy is expected to grow 2.2% in 2026. Strong corporate spending on AI infrastructure helps offset weaker consumer demand. US inflation is projected at 3.6% this year before easing to 2.6% in 2027.
China’s economy is expected to expand 4.5% this year. Efforts to address excess industrial capacity may weigh on investment. Meanwhile, Europe’s growth is projected at only 1.0% due to energy and interest rate constraints.
