On 23 September, the Organisation for Economic Co-operation and Development (OECD) released its latest Economic Outlook, Interim Report, titled 'Weathering Successive Shocks', raising its forecast for 2026 global economic growth to 2.9%, up from the 2.8% projected in June, while trimming its 2027 global growth forecast slightly from 3.1% to 3.0%. The report represents the OECD's latest assessment of the global growth outlook this year. It found that although global growth slowed somewhat in the first half of the year amid turmoil in the Middle East, many economies showed considerable resilience, with overall performance surpassing earlier expectations.

The report notes that conflict in the Middle East disrupted energy markets and global supply chains for part of the year, creating downward pressure on the world economy. However, the impact was largely cushioned thanks to relatively ample oil inventories, continued additional energy supply from outside the Gulf region, some countries drawing down strategic petroleum reserves, the switch to alternative commodity inputs, and temporary support measures introduced by several governments. As a result, the Middle East turmoil did not escalate into the more severe global shock that some institutions had feared earlier in the year.

Sustained strength in artificial-intelligence-related investment was identified by the OECD as a key engine behind global growth in investment, production and trade this year. The report specifically notes that South Korea and Japan, two leading semiconductor-producing economies, saw significant growth in technology exports over the period covered, partly driven by demand for semiconductors and related electronics tied to the global AI investment boom. Meanwhile, several G20 emerging-market economies — including India, Indonesia and Brazil — maintained relatively solid growth momentum, supported by resilient domestic demand and government relief measures that cushioned households and businesses during the period of higher energy prices.

In concrete terms, the OECD projects Indian growth will gradually ease from its current strong pace: from 7.8% in fiscal year 2025/26 to 7.1% in FY2026/27, and further to 6.5% in FY2027/28, while Indonesia's growth outlook remains comparatively stable, at 5.2% in 2026 and 5.1% in 2027. The report also forecasts that overall G20 inflation will gradually recede from current levels to around 4.1% by the end of 2026, giving major central banks some room to adjust interest rates going forward.

As the world's second-largest economy, China's growth outlook in the report also drew close attention. The OECD set China's 2026 growth forecast at 4.5%, down from 5.0% in 2025, with the forecast easing further to 4.2% in 2027. The report attributes China's slowdown mainly to a gradual rise in domestic inflation weighing on consumption, alongside government policies to curb 'involutionary' excess competition and rein in overcapacity, which have also dampened investment growth. The report nonetheless stresses that, given its sheer economic scale as the world's second-largest economy, China's growth — even at a more moderate pace — continues to exert a significant pull on global economic growth, making it one of the key forces underpinning the resilience the global economy has shown.

Among major advanced economies, the US 2026 growth forecast was raised to 2.2%, up from 2.0% projected in June, while its 2027 forecast was revised up from 1.8% to 2.1%, which the OECD attributed to resilient consumer spending and solid investment momentum. The eurozone's 2026 forecast was raised from 0.8% to 1.0%, Japan's from 0.6% to 0.8%, and the UK's from 0.9% to 1.1%. In addition, South Korea's 2026 growth forecast was raised to 3.7%, reflecting the clear benefit major Asian economies have derived from the current upturn in the global technology supply chain.

OECD Chief Economist Stefano Scarpetta, speaking at the report's launch, cautioned that global trade tensions remain a significant drag on the outlook, noting that continued shifts in trade policy — both tariffs and export restrictions — are adding to policy uncertainty and risk causing fresh supply-chain disruptions. The report also lists several downside risks that could cause global growth to fall short of the current projection, including prolonged disruption to exports from the Middle East, weather-related supply shocks associated with a very strong El Niño, further increases in long-term sovereign bond yields, and the possibility that returns on AI-related investment fail to meet market expectations.

In response to these risks, the OECD recommends that central banks remain vigilant in keeping inflation expectations anchored, and adjust monetary policy stances in a timely and flexible manner based on the price pressures and growth outlook each economy faces, striking a balance between supporting growth and guarding against a resurgence of inflation. The report also calls on governments to avoid policies that would raise trade barriers or disrupt global supply chains, stressing that an open and predictable international trading environment is essential to sustaining the hard-won resilience the global economy has shown.

Overall, the OECD's upward revision to its global growth forecast signals that the world economy has remained relatively steady despite geopolitical turmoil and volatility in energy markets, with the boom in AI-related investment and flexible macroeconomic policy responses from major economies together underpinning this round of resilience. As the world's second-largest economy, China's growth, though more moderate than before, will — given its scale and position in global supply chains — continue to play a significant role in the pattern of global economic growth for some time to come. Markets widely expect the OECD to further update and assess these growth forecasts in its next full Economic Outlook report, due to be released later this year.

The report also offers an inflation outlook: reflecting a temporary rise in energy and other commodity prices, headline inflation across G20 economies is projected to ease from around 4.1% in 2026 to 3.6% in 2027, while core inflation in advanced economies is expected to fall from 2.7% to 2.5% over the same period — meaning inflationary pressure may pick up in the near term before gradually easing. OECD Secretary-General Mathias Cormann, who presented the report alongside Chief Economist Stefano Scarpetta, said the global economy had absorbed the energy shock stemming from the Middle East conflict better than previously expected, though it remains exposed to risk. He stressed that government fiscal measures introduced to cushion the energy shock should remain targeted and temporary, given that most countries have limited fiscal space, and noted that expanding renewable energy generation and improving energy efficiency can both strengthen energy security and boost economic resilience to future price shocks.

The OECD typically publishes two full Economic Outlook reports each year — around May-June and November-December — along with interim updates in March and September that provide a rolling assessment of growth, inflation and other key indicators for the world economy and G20 members. This September interim report is the latest update this year, following the March and June assessments, and amounts to an important 'health check' on the resilience of the world economy amid an evolving Middle East situation and rising uncertainty over global trade policy. Markets widely expect the OECD to further adjust its growth outlook for the world and major economies, based on the latest available data, in its next full report due later this year, with China's trajectory as the world's second-largest economy likely to remain a particular focus of attention at that time. Several economists also noted that this modest upward revision partly reflects the strong policy coordination and flexible response major economies' policymakers have shown in the face of successive risks such as energy shocks and geopolitical turmoil — a positive reference point for assessing the global economy's medium- to long-term resilience.