The OECD has nudged up its forecast for global growth this year to 2.9%, saying the world economy has absorbed the energy shock from the Iran war better than expected, but it warned that persistent inflation, rising bond yields and the risk of a longer conflict continue to cloud the outlook.
The global economy is proving sturdier than feared.
In its interim outlook published on Wednesday, the OECD raised its 2026 growth projection by 0.1 percentage point from June, concluding that the world economy “has weathered the energy supply shock triggered by the conflict in the Middle East better than expected.”
That still marks a clear slowdown from the 3.4% growth recorded last year, and the OECD also trimmed its forecast for 2027 by 0.1 percentage point to 3%.
The upgrades were broad.
The US is now expected to grow 2.2% this year and the eurozone 1%, both up 0.2 percentage points, while Japan’s forecast rose by the same margin to 0.8%. China’s projection was left unchanged at 4.5%, and the G20 together is expected to expand 3.1%.
Within the eurozone, the OECD expects Spain to grow by 2.6% in 2026 and 1.8% in 2027, ahead of the other countries covered in its September update. Germany is forecast to grow by 1.1% in both years, Italy by 0.9% and 0.6%, and France by 0.4% and 0.7%, respectively. The eurozone as a whole is expected to grow by 1% in each year.
Energy prices have soared since the US and Israel launched strikes on Iran in February, but several factors softened the blow.
The OECD pointed to sizeable oil inventories, extra supply from producers outside the Gulf and discretionary government support measures, while broader financial conditions, including rising stock markets and continued access to credit, have remained supportive.
Heavy investment in AI has also bolstered production and trade, and the organisation said it could yet deliver stronger growth than projected.
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