OECD Raises 2026 Global Growth Forecast to 2.9%

The Organisation for Economic Co-operation and Development raised its 2026 global economic growth forecast to 2.9%, a 0.1 percentage point increase from June estimates, in its Economic Outlook Interim Report released Wednesday. The organization characterized global growth as resilient, attributing the upward revision to supportive financial conditions, rising equity markets, and massive investments in artificial intelligence. However, growth has slowed from 3.4% last year, and the 2027 forecast was trimmed to 3%.

The report warns that G20 headline inflation will rise from 3.4% in 2025 to 4.1% in 2026 before easing to 3.6% in 2027. Rising oil and gas prices have already pushed government bond yields to levels not seen since the 2007-2008 financial crisis, forcing governments to raise interest rates. While sizeable oil inventories and non-Gulf supply cushioned the initial impact of February strikes against Iran by the United States and Israel, the organization warns that further disruptions to the Strait of Hormuz or Bab al-Mandeb Strait could trigger sustained energy price increases.

Beyond geopolitical tensions, the organization identified weather-related supply shocks from a strong El Nino as a risk to agricultural production and food costs. To maintain debt sustainability and contain inflation, the organization recommended that central banks potentially adjust monetary policy rates and urged governments to implement structural reforms to improve public-sector efficiency and diversify energy supplies.