The Organisation for Economic Co-operation and Development (OECD) has raised its forecast for global economic growth in 2026 to 2.9%, up from the 2.8% estimate provided in June, according to its latest economic outlook released on September 23.

The report acknowledges that while geopolitical tensions in the Middle East have weighed on the global economy, contributing to a slowdown in the first half of this year, many nations have demonstrated notable resilience in the face of these challenges.

A combination of ample oil inventories, additional energy supplies from regions outside the Gulf area, and supportive policy measures in certain countries has helped to cushion the broader economic impact stemming from the Middle East situation.

At the same time, continued momentum in the artificial intelligence sector has spurred growth in investment, production, and international trade, providing a further boost to the overall outlook.

However, the OECD cautions that the global economic trajectory remains heavily dependent on the future course of the Middle East conflict, with energy prices having climbed again recently as oil production and exports from the Gulf region face ongoing disruptions.

In addition, supply constraints driven by extreme weather events have pushed up prices for several agricultural commodities in recent months, while ongoing adjustments to trade policies, including tariffs and export restrictions, have amplified policy uncertainty and supply chain disruptions.

The report projects that short-term inflationary pressures will intensify due to rising commodity prices, but these are expected to ease gradually by 2027, with inflation across G20 economies forecast to decline from 4.1% in 2026 to 3.6% in 2027, and core inflation in advanced economies projected to moderate from 2.7% to 2.5% over the same period.