Global economic growth is expected to slow to 2.6% in 2026 from 2.9% in 2025, as the energy shock linked to the Middle East crisis puts pressure on economies worldwide, the United Nations Conference on Trade and Development (UNCTAD) said on Friday.
Global trade in goods and services is projected to grow by 4% in constant prices, following a record $35 trillion in trade last year. However, UNCTAD warned that higher energy prices are contributing to the expected increase.
Trade between China and the United States has fallen by more than 20% since 2024, while East Asia has expanded trade with both China and North America. UNCTAD said export controls, investment screening and supply chain restrictions are making it harder for new businesses to enter strategic industries.
Asia is expected to account for 59% of global economic growth in 2026, led by projected growth of 7.3% in India, 5.2% in Indonesia and 4.5% in China.
Artificial intelligence related products, particularly semiconductors, are driving merchandise trade. However, UNCTAD cautioned that growth in AI trade may not translate into wider development benefits and warned that heavy market exposure to a small number of companies could create financial stability risks.
The World Bank has forecast global growth of 2.5% in 2026, while the International Monetary Fund projects 3%. Both institutions have identified the Middle East conflict and trade disruptions as significant risks to the global outlook.
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