Key Points
- Global growth forecast raised to 2.9 per cent from 2.8 per cent
- Artificial intelligence investment helps offset the impact of higher energy costs
- OECD cuts 2027 growth forecast to 3 per cent from 3.1 per cent
ISLAMABAD: The Organisation for Economic Co-operation and Development (OECD) has raised its global economic growth forecast for 2026 to 2.9 per cent from 2.8 per cent, saying strong investment linked to artificial intelligence is helping economies withstand the impact of the Middle East war and higher energy costs.
The upgrade, released on Wednesday, is 0.1 percentage point above the OECD’s June forecast.
However, the Paris-based organisation lowered its 2027 growth projection to 3 per cent from 3.1 per cent as the Middle East energy shock is expected to weigh more heavily on the global economy.
The OECD said artificial intelligence-related investment has provided some important source of support for economic activity this year.
This has helped offset some of the effects of higher energy prices and continuing geopolitical uncertainty.
Outlook carries global inflation risk
The outlook nevertheless shows growing inflation risks. The OECD expects inflation across the Group of 20 major economies to average 4.1 per cent in 2026, while its 2027 forecast has been raised to 3.6 per cent.
Among major economies, the OECD raised its 2026 growth forecast for the United States to 2.2 per cent.
Eurozone growth is projected at 1 per cent and Japan at 0.8 per cent. Both forecasts also increased by 0.2 percentage points. China’s growth forecast was maintained at 4.5 per cent.
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The OECD warned that the outlook remains exposed to significant risks, including further energy disruptions, renewed inflationary pressure and financial-market vulnerabilities.
It also said adverse developments linked to artificial intelligence investment and earnings could reduce global growth.
The latest forecast highlights the resilience in the world economy but also points to a more difficult 2027 as the effects of the Middle East conflict and energy shock become more persistent.
