The United Nations has further lowered its forecast for global economic growth, warning that the ongoing Middle East crisis has intensified inflationary pressures and increased economic uncertainty worldwide.
According to the UN’s mid-year update on the global economic situation and prospects, global GDP growth is now projected at 2.5% in 2026.
This marks a decline from the estimated 3.0% growth in 2025 and is also 0.2 percentage points lower than the organization’s January forecast.
The UN noted that the projected growth rate remains well below pre-pandemic levels.
A modest recovery to 2.8% growth is forecast for 2027.
The report stated that rising energy prices have generated major profits for energy companies while simultaneously increasing cost pressures on households and businesses around the world.
Inflation is also expected to worsen:
- In advanced economies, inflation is forecast to rise from 2.6% in 2025 to 2.9% in 2026
- In developing economies, inflation is projected to increase from 4.2% to 5.2%
The UN further warned that disruptions to fertilizer supplies and rising fertilizer prices could reduce agricultural production and push global food prices even higher.
Regional forecasts highlighted significant disparities:
- West Asia is expected to experience the sharpest slowdown, with growth forecast to fall from 3.6% to 1.4%
- The United States is expected to remain comparatively resilient, with projected growth of 2.0% in 2026, supported by strong domestic demand and technology investment
- Growth in the European Union is forecast to slow from 1.5% to 1.1%
- The United Kingdom is expected to slow from 1.4% to 0.7%
- China is forecast to see growth moderate from 5.0% to 4.6%, supported by diversified energy resources, strategic reserves and government policy support
- India’s growth is expected at 6.4%, compared with 7.5% previously
- Across Africa, average growth is projected to ease slightly from 4.2% to 3.9%
The report reflects growing concerns that prolonged geopolitical instability and energy market disruptions could continue affecting global inflation, trade, food security, and investment flows.
