The OECD now expects the global economy to grow by 2.9% in 2026 and 3.0% in 2027, after the disruption to energy supplies proved less damaging in the immediate term than feared. Its new outlook still warns that higher energy costs, weaker buffers and uncertain financing for AI investment leave the expansion exposed.
The Organisation for Economic Co-operation and Development published its Interim Economic Outlook on 23 September. It said alternative supply routes, releases from inventories, extra production outside the Gulf and softer Chinese demand had helped limit the economic damage from the Middle East energy shock.
That cushioning does not remove the cost. The OECD expects G20 inflation to average 4.1% in 2026 and 3.6% in 2027, both higher than in its June forecast. It expects the pressure on growth to be strongest around the turn of the year, before inflation begins to ease as energy prices fall back.
Forecasts improved for this year, not for the next
The forecast for 2026 global growth is 0.1 percentage point higher than the OECD projected in June. Its 2027 forecast is 0.1 percentage point lower. The change is small, but it describes an economy that has so far absorbed the shock while carrying more inflation into next year.
The OECD projects US growth of 2.2% in 2026 and 2.1% in 2027. It expects the euro area to grow by 1.0% in both years, while China is projected to expand by 4.5% in 2026 and 4.2% in 2027.
These are baseline projections, not a guarantee about what will happen. They assume that the disruption to energy markets does not become materially worse. A longer or more severe conflict could produce a different result through fuel prices, shipping, consumer confidence and financial markets.
Inventory and savings cushions are finite
Part of the near-term resilience reflects buffers already available to households, businesses and governments. The OECD points to stock drawdowns, including co-ordinated releases of strategic oil reserves, as well as inventories held by companies. Those measures can reduce a shortage or price spike for a time, but they cannot permanently replace disrupted supply.
There is a separate complication in the refined-products market. The OECD said bottlenecks in refining are lifting margins on top of the rise in crude oil, increasing the chance that households see the shock at the fuel pump even where raw oil supply is available.
MBN’s recent report on stronger second-quarter G20 trade recorded a period when goods imports and services flows were accelerating. The OECD now identifies AI-related investment as another support for trade and activity, but neither strength makes the outlook immune to a more persistent energy shock.
AI investment is support and a source of risk
The outlook credits strong investment in artificial intelligence with supporting trade and growth. That spending can lift demand for equipment, data-centre capacity, power systems and related services.
At the same time, the OECD says rapid AI investment is becoming more dependent on external finance. If anticipated returns fail to materialise, a market correction could amplify the slowdown. That does not mean the OECD predicts such a correction. It is a risk to a forecast already exposed to energy and geopolitical uncertainty.
Policy choices will be constrained
The OECD asks central banks to keep inflation expectations anchored and governments to use targeted, temporary support rather than broad energy subsidies. Its reasoning is that blanket aid can reduce the incentive to conserve fuel while adding to fiscal costs.
Higher long-term government bond yields add to that difficulty. They make it more expensive for governments to roll over debt and restrict the scope for new spending when households and firms are facing higher costs. Weather-related disruptions could add another layer by putting further pressure on food commodities.
The report therefore offers a cautious reading of resilience. Global output has held up better than the OECD expected in the short run. The question for 2027 is whether energy costs recede before the buffers that softened the first impact run out.
