OECD raises global growth forecast for 2026 to 2.9% — Asharq Al-Awsat

The Organisation for Economic Co-operation and Development (OECD), based in Paris, France, has raised its forecast for global economic growth in 2026 to 2.9%. This is 0.1 percentage points higher than its June estimate. As Asharq Al-Awsat reports, the OECD believes that the economies of many countries remained resilient despite the war in the Middle East and rising energy prices.

Factors supporting the economy

The OECD noted that overall financial conditions remain favourable: stock markets are rising and access to credit is being maintained. According to the organisation, the impact of high energy prices has been partly mitigated by substantial oil reserves, additional supplies from outside the Gulf countries, and discretionary government support measures.

The OECD identified large-scale investment in artificial intelligence as a separate factor. It is stimulating production and trade and may deliver higher growth rates than those envisaged in the baseline forecast.

At the same time, global economic growth has slowed significantly compared with 3.4% last year. The organisation lowered its forecast for 2027 by 0.1 percentage points, to 3%.

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Inflation and debt risks

The OECD warned that a prolonged war in the Middle East could lead to a longer period of inflationary pressure. In the G20 group, price growth this year is projected at 4.1%. Among other risks, the organisation cited possible weather shocks, including a very strong El Niño phenomenon, which could damage agricultural production and intensify food price growth.

Because of more expensive oil and gas, governments have begun raising interest rates to contain inflation. This contributed to government bond yields rising to levels not seen since the global financial crisis of 2007–2008 and increased borrowing costs at a time of high debt and deficits in many countries.

Estimates for the largest economies

The OECD raised its US GDP growth forecast for 2026 by 0.2 percentage points, to 2.2%. Growth of 1% is expected for the eurozone and 0.8% for Japan; both estimates were also raised by 0.2 percentage points. The forecast for China was left unchanged at 4.5%. According to the OECD's estimate, the G20 economies will grow by 3.1%.