Page 13 - Policy Economic Report - September 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

growth remains relatively subdued compared with the United States and the euro area. Japan's growth is
projected to moderate marginally from 0.8% in 2026 to 0.7% in 2027. Strong business investment, robust
corporate profits and government consumption are expected to support activity, while rising policy rates
and higher energy-import costs are likely to act as constraints.

Among other advanced Asian economies, South Korea is projected to record relatively strong growth
of 3.7% in 2026, supported by robust industrial production and export growth, before moderating to 2.6%
in 2027 as private consumption growth becomes more modest. Canada's growth is expected to soften
to 0.9% in 2026, before recovering to 1.3% in 2027, supported by stronger private consumption and
government investment.

The latest S&P Global business surveys broadly reinforce the picture of continued expansion across
advanced economies. Economic activity across the US, euro area, Japan and UK—the G4—accelerated to
its fastest pace in around four and a half years in September, although the improvement was led
predominantly by the United States. The euro area also recorded stronger growth, while Japan's
expansion moderated and the UK remained comparatively weak.

Growth Forecast - Emerging Market and Developing Economies

Growth across emerging-market economies is expected to remain broadly stable in 2026, although the
outlook remains differentiated across countries. The OECD Interim Economic Outlook, September
2026 notes that resilient domestic demand, government support measures and continued investment
have helped several emerging economies absorb the impact of higher energy prices. At the same time,
elevated energy costs, weaker purchasing power and persistent trade and policy uncertainties are
expected to moderate growth in some major emerging markets.

China's growth is projected to moderate from 5.0% in 2025 to 4.5% in 2026 and 4.2% in 2027. The
slowdown reflects weaker consumption as headline inflation gradually rises, alongside more restrained
investment as government measures to address excess industrial capacity take effect. The adjustment in
the property sector is also expected to remain a constraint on activity.

India remains one of the fastest-growing major emerging economies. The OECD projects India's growth to
moderate from 7.8% in FY2025–26 to 7.1% in FY2026–27 and 6.5% in FY2027–28. While recent economic
momentum has remained strong, growth is expected to soften during the second half of the current fiscal
year as higher prices affect purchasing power, before gradually recovering in 2027. Government measures
to cushion households and firms from higher energy prices are expected to provide some support. S&P
Global has also revised its 2026 full-year growth forecast for India upward by 0.3 percentage point to
6.5%, following stronger-than-expected first-quarter data.

The latest data underline the strength of India's underlying economic performance. India's GDP expanded
by 8.1% year-on-year in Q2 2026, the highest among G20 economies with available data, although
quarterly growth moderated to 1.8% from 2.1% in the previous quarter.

September 2026 Page | 12