U.S. Economy Expected to Outpace Allies on Back of AI Boom

The Organisation for Economic Co-operation and Development (OECD) predicts that the U.S. economy will grow at a rate of 2.2% this year, significantly outpacing its major allies. This growth is expected to be twice as high as projected for the eurozone, Germany, and the UK.

The OECD attributes this exceptionalism to the AI investment boom, which has given the U.S. economy a powerful shock absorber that many other economies lack. Rapid growth in AI investment and production has partially counterbalanced the economic hit from the Middle East conflict, directly boosting U.S. growth through data center and technology spending.

However, this exceptionalism comes at a cost: more persistent inflation and interest rates that may need to stay higher for longer to restrain it. The OECD expects U.S. headline inflation to fall from 3.6% this year to 2.6% next year, but that forecast is half a percentage point higher than it projected in June.

OECD chief economist Stefano Scarpetta pointed to rising sovereign bond yields, risks surrounding the AI investment boom, and potential extreme weather events pushing food prices higher as major concerns. The OECD has become more optimistic about the U.S. since June, lifting its growth estimate by 0.2 percentage points for 2026 and 0.3 points for 2027.