World economic growth to slow to 2.6% in 2026, UN trade body says
Global economic growth will likely slow to 2.6% in 2026, down from 2.9% last year, as the energy shock from the crisis in the Middle East is putting the global economy to the test, the United Nations agency for trade and development said on Friday. Trade in goods and services is expected to expand by 4% in constant prices, after global trade reached a record $35 trillion in 2025, but the…
The United Nations agency for trade and development has forecast global economic growth to decelerate to 2.6% in 2026, a decline from 2.9% in the previous year. The slowdown is attributed to the ongoing energy crisis in the Middle East, which is testing the global economy. Despite this, global trade in goods and services is projected to increase by 4% in constant prices, following a record $35 trillion in 2025.
However, this growth is largely influenced by rising energy prices. The report from UNCTAD highlights that trade between China and the US has plummeted by more than 20% since 2024. Meanwhile, Asia is set to contribute 59% of the global economic growth in 2026, with India expanding at 7.3%, China by 4.5%, and Indonesia by 5.2%. The organization warns that strategic sectors are becoming increasingly inaccessible for new entrants due to export controls, investment screening, and supply-chain challenges.
While AI products, particularly semiconductors, are driving merchandise trade, the agency cautions that this does not necessarily translate to overall development gains. Instead, the rapid expansion of AI-related trade could exacerbate financial stability risks as markets become overly reliant on a few key companies. The World Bank recently lowered its global growth forecast to 2.5%, with a potential drop to 1.3% in the worst-case scenario, citing the Middle East war as a major factor.
The International Monetary Fund is slightly more optimistic, projecting a 3% growth rate, but has also highlighted risks such as trade fragmentation and AI-related corrections.
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