FX.co ★ OECD Sees Modest Growth Ahead, Raises Inflation Forecast

Global GDP growth is projected to remain at 2.9% in 2026 before edging up to 3.0% in 2027, supported by robust technology investment and a reduction in trade tariffs, according to the latest OECD Economic Outlook. Nonetheless, the continued conflict in the Middle East is dampening growth and adding uncertainty. The baseline projections assume a temporary disruption in energy markets, followed by some relief in energy prices from mid‑2026 onward.

Inflation forecasts have been revised higher. In the G20 advanced economies, headline inflation is now expected to reach 4.0% in 2026—1.2 percentage points above earlier estimates—before easing to 2.7% in 2027. Core inflation is forecast to decline more gradually, from 2.6% in 2026 to 2.3% in 2027.

Regionally, US growth is forecast to slow from 2.0% in 2026 to 1.7% in 2027, with inflation peaking at 4.2% this year. China’s growth is expected to moderate to 4.4% in 2026 and 4.3% in 2027. The Eurozone is set for a weak expansion of 0.8% in 2026, followed by a modest recovery to 1.2% in 2027. Japan’s economy is projected to grow by 0.9% in both 2026 and 2027.