span>span>Wednesday 1st April 2026/span>span> - 10:55 (BST)/span>/span>
Global economic growth is projected to hold at 2.9% in 2026 before edging higher to 3.0% in 2027, according to the latest OECD Economic Outlook. The modest expansion is expected to be supported by continued investment in technology and a gradual easing of trade tensions, although the pace of growth remains subdued by historical standards.
The ongoing conflict in the Middle East continues to cast a shadow over the outlook, adding uncertainty to global demand and energy markets. Current projections assume that disruptions to energy supply will prove temporary, with price pressures beginning to ease from mid-2026.
Inflation forecasts have been revised higher, particularly across advanced economies. Headline inflation in G20 advanced economies is now expected to reach 4.0% in 2026, 1.2 percentage points above previous estimates, before moderating to 2.7% in 2027. Core inflation is projected to ease more gradually, slipping from 2.6% to 2.3% over the same period.
Regional divergences remain pronounced. US growth is expected to slow from 2.0% in 2026 to 1.7% in 2027, with inflation peaking at 4.2% this year. China’s economy is forecast to expand by 4.4% in 2026 and 4.3% in 2027, while the Eurozone is set for a more subdued 0.8% growth in 2026 before a modest recovery to 1.2% in 2027. Japan’s expansion is expected to remain steady but modest at 0.9% across both years.
For currency markets, the combination of elevated inflation and uneven growth trajectories is likely to reinforce policy divergence across major central banks. This dynamic may continue to support the US dollar in the near term, particularly if inflation proves more persistent in the US relative to other advanced economies, although any stabilisation in global growth could begin to shift sentiment toward higher-beta currencies over time.
