Paris: The global economy is expected to continue expanding in 2026 and 2027, but growth is projected to remain moderate as higher prices, financial conditions and geopolitical uncertainty continue to influence economic activity.

The latest assessment from the Organisation for Economic Co-operation and Development (OECD) projects global GDP growth at around 2.9% in 2026, followed by a modest increase to approximately 3.0% in 2027.

The outlook indicates that the world economy continues to show resilience despite several pressures affecting businesses, households and governments.

AI investment supports economic activity

One of the notable factors supporting global growth is the rapid expansion of investment connected with artificial intelligence.

Companies are increasing spending on data centres, computing infrastructure, semiconductors and other technologies needed to develop and deploy AI systems. This investment is contributing to activity in several parts of the global economy.

However, the OECD has also highlighted uncertainty surrounding the long-term economic returns from the current wave of AI-related investment.

Price pressures remain a concern

Inflation has declined from the exceptionally high levels experienced during earlier periods of the global economic shock, but price pressures have not disappeared completely.

Higher energy, food and other input costs can continue to affect household purchasing power and business expenses.

The persistence of inflation also creates challenges for central banks as they attempt to balance price stability with economic growth.

Household spending faces pressure

Consumers in several economies continue to face pressure from elevated living costs.

Although employment conditions have remained relatively resilient in many countries, slower real-income growth can limit household consumption.

Consumer demand is an important component of economic activity, meaning weaker purchasing power could affect the pace of recovery in some economies.

Trade and geopolitical risks

Global trade remains another important source of uncertainty.

Geopolitical tensions, changes in trade policies and disruptions to supply chains can increase production costs and affect investment decisions.

Businesses are increasingly reassessing supply chains and sourcing strategies in response to geopolitical developments.

These changes could influence the movement of goods, investment and capital across borders.

Different economies face different conditions

The global outlook is not uniform. Advanced economies and emerging markets are experiencing different combinations of inflation, employment, investment and fiscal pressures.

Some economies are benefiting from strong technology investment and resilient domestic demand, while others continue to face weaker productivity growth, high borrowing costs or fiscal constraints.

Emerging and developing economies can also be particularly vulnerable to changes in global financial conditions because higher interest rates and currency movements can increase the cost of servicing external debt.

Interest rates remain important

Monetary policy continues to play an important role in determining the global economic outlook.

Central banks must assess inflation, labour-market conditions and economic growth when deciding how quickly to adjust interest rates.

A prolonged period of relatively tight financial conditions could restrain investment and borrowing, while a faster easing of monetary policy could provide additional support to economic activity if inflation allows.

Outlook for 2027

The OECD’s projection of approximately 3.0% global growth in 2027 suggests a modest improvement compared with 2026.

However, the organisation’s assessment also emphasizes that the outlook remains subject to considerable uncertainty.

Developments in energy prices, geopolitical tensions, global trade, inflation and financial markets could all influence the final growth outcome.

The latest projections therefore point to a world economy that is continuing to expand but remains exposed to multiple risks.

For governments and businesses, the challenge will be to maintain economic resilience while improving productivity, controlling inflation and adapting to rapid technological changes.