The Organisation for Economic Co-operation and Development said this week that robust spending on artificial intelligence infrastructure has helped the global economy perform a bit better than expected for 2026, but it warned that an entrenched energy price shock will weigh on growth heading into 2027.
Following global expansion of 3.4% last year, the OECD now expects world growth to slow to 2.9% in 2026 - a marginal improvement on the 2.8% it forecast in June. Looking further ahead, however, the group cautioned that the commodity price shock tied to the Middle East conflict is set to sap momentum and has trimmed the outlook for 2027. The OECD projects global growth to recover to just 3.0% in 2027, down from a 3.1% projection in June.
Central to the strength the OECD identifies this year is heavy investment in AI-related capital goods - notably data centres and semiconductors. The organisation said those investments have been a key source of resilience, supporting activity in the United States and lifting technology exports from Japan and Korea.
Yet the OECD pointed to several cross-cutting risks that could worsen the path for both growth and prices. It highlighted the potential for renewed instability in energy markets, the prospect of extreme weather associated with a strong El Ni-o event, a rise in government bond yields and the possibility that returns on AI investments disappoint relative to expectations. Combined, the OECD estimated those risks could slice 0.7 percentage points off global growth next year and lift global inflation by 1.1 percentage points if they materialise.
Under its baseline scenario, the OECD now sees inflation across G20 economies averaging 4.1% in 2026, slightly above the 4.0% it had anticipated in June. It also raised its inflation projection for 2027 to 3.6%, up from 3.1% in the previous forecast. The organisation warned that broader price pressures or a weakening growth profile could prompt central banks to reconsider interest rate paths.
Regional and country-level outlooks in the OECD report show divergent trajectories.
- United States - Growth in the world’s largest economy is seen at 2.2% this year and 2.1% in 2027, both revisions upward from the June outlook. The OECD attributes the stronger profile to heavy AI-related investment, which has offset weaker consumer spending. US inflation is projected at 3.6% in 2026, easing to 2.6% in 2027. The organisation noted that tariffs and higher energy prices will weigh on household purchasing power and business costs.
- China - Growth is expected to moderate to 4.5% this year and 4.2% in 2027, unchanged from the June forecast. The OECD said Beijing’s measures to curb excess industrial capacity are damping investment even as consumption faces a gradual uptick in inflation.
- Euro zone - The bloc’s output is forecast to hold at 1.0% in both 2026 and 2027, with higher energy prices and elevated interest rates weighing on activity until planned defence spending provides some support. Euro zone inflation is seen at 3.0% this year and 2.9% in 2027, partly driven by a jump in natural gas prices amid European storage levels at 15-year lows approaching the winter heating season.
- Japan - The economy is expected to expand 0.8% in 2026 and 0.7% in 2027. The OECD said rising policy rates and more costly energy imports will offset strong business investment. Japan’s inflation is forecast to accelerate to 2.6% in 2027 from 1.8% this year, reflecting a tight labour market and solid wage growth.
- Canada - The OECD cut its 2026 growth forecast to 0.9% from 1.2% in June and trimmed the 2027 outlook to 1.3% from 1.7%, citing the impact of new US tariffs on Canadian exports.
The OECD’s assessment frames AI capital spending as a near-term growth lever concentrated in technology investment and exports, while energy-driven cost pressures and geopolitical shocks present a material drag that could temper gains beyond 2026. The organisation’s estimates underline a trade-off for policymakers: the near-term boost from technology investment versus the inflationary and growth risks linked to commodity markets and broader macro volatility.