Global Economic Growth May Slow to 2.6% in 2026 Amid Middle East Crisis: UNCTAD
UNCTAD expects global growth to ease to 2.6% in 2026 as the Middle East crisis pushes up energy costs. Asia is projected to drive 59% of global growth, with India forecast to expand by 7.3%.
Global economic growth is projected to slow to 2.6% in 2026 from 2.9% in 2025 as the Middle East crisis fuels an energy shock, according to the United Nations Conference on Trade and Development (UNCTAD).
In its Trade and Development Report, UNCTAD forecast global trade in goods and services to grow by 4% in constant prices this year. Global trade reached a record $35 trillion in 2025, although higher energy prices are expected to contribute significantly to this year's increase.
Asia to support global growth
Asia is projected to account for 59% of global economic growth in 2026. UNCTAD expects India to grow by 7.3%, China by 4.5% and Indonesia by 5.2%.
The forecasts highlight Asia's role in supporting the world economy amid geopolitical tensions and rising energy costs.
US-China trade patterns shift
Trade between the United States and China has declined by more than 20% since 2024, UNCTAD said. Meanwhile, East Asia has expanded trade with both China and North America.
The organisation also warned that export controls, investment screening and supply-chain restrictions could make it harder for new businesses to enter strategic industries.
AI trade brings financial risks
Artificial intelligence-related products, including semiconductors, are emerging as major drivers of merchandise trade. However, UNCTAD warned that concentrated market exposure to a small number of companies could threaten financial stability.
The World Bank has forecast global growth of 2.5% in 2026, while the International Monetary Fund projects 3%, reflecting differing assessments of risks facing the global economy.
