OECD Raises Inflation Outlook As Energy Shock Complicates Monetary Policy

Global inflation is expected to remain elevated as higher energy prices feed into consumer prices, while central banks may need to maintain restrictive monetary policies, according to the OECD’s September 2026 interim economic outlook.

OECD has warned that renewed energy-price pressures could keep inflation elevated and require central banks to remain vigilant. [Photo: OECD X]

The OECD raised its inflation projections for most G20 economies compared with its June outlook. It forecasts G20 headline inflation at 4.1% in 2026, before easing to 3.6% in 2027.

In advanced G20 economies, headline inflation is projected to rise to 3.2% this year before declining to 2.6% in 2027.

For the United States, the OECD projects headline inflation will fall from 3.6% in 2026 to 2.6% in 2027, despite continuing cost pressures from tariffs and higher energy prices.

The OECD said central banks need to ensure that underlying inflation pressures are durably contained amid renewed energy-price shocks and stronger-than-expected demand pressures.

 Chief Economist Stefano Scarpetta said policymakers need to remain vigilant.

The report also raised the OECD’s global growth forecast for 2026 to 2.9%, from 2.8% in June, while lowering its 2027 projection to 3.0% from 3.1%. The organization said AI-related investment is helping support economic activity, while the energy shock remains a significant risk.