OECD flags inflation risks as energy costs climb, global growth weakens

G20 inflation is set to reach 4% in 2026, with uneven regional growth and central banks urged to stay cautious, said OECD.

Higher energy prices, driven by supply disruptions and geopolitical tensions, are expected to push inflation to around 4.0% in 2026 across G20 economies, according to the Organisation for Economic Co-operation and Development (OECD).

In its Economic Outlook - Interim Report released in March 2026, OECD also projects global growth to slow, with GDP rising around 2.9% in 2026, down from 3.3% in 2025, before a modest recovery to 3.0% in 2027.

Growth will vary by region, with the United States projected at 2.0% in 2026, easing to 1.7% in 2027, whilst in the near term, the euro area is projected at 0.8%, with China at 4.4%, and India at 7.6%.

The OECD said higher energy costs are feeding through to overall prices and could keep inflation higher for longer than previously expected.

OECD advises that central banks may need to remain cautious when adjusting interest rates.

The organisation also noted that targeted fiscal measures could help vulnerable households whilst maintaining overall fiscal discipline and supporting structural reforms.