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Global economic growth is expected to slow to 2.6 percent in 2026, down from 2.9 percent in 2025, as an energy shock linked to the Middle East weighs on households and businesses, according to UNCTAD, the UN’s trade and development body.
The forecast reflects how quickly energy prices move through the rest of the economy. When fuel and shipping costs rise, manufacturers pay more to produce and move goods, retailers face weaker consumer demand, and central banks come under pressure to keep interest rates higher for longer than they otherwise would.
Trade tells a more complicated story. UNCTAD expects trade in goods and services to expand by about 4 percent in constant prices in 2026, following a record year in which global trade reached 35 trillion dollars in 2025. Analysts say part of that momentum is driven by higher energy prices themselves, which lift the value of shipments moving through ports even when volumes grow more modestly.
Asia is projected to supply the bulk of global expansion, accounting for 59 percent of world growth. Within the region, India is forecast to grow by 7.3 percent, Indonesia by 5.2 percent, and China by 4.5 percent. Those figures underline a continuing shift in the centre of economic gravity toward Asia, even as China’s pace moderates compared with earlier decades.
For developing economies outside Asia, the picture is harder. Many import most of their fuel and some of their food, so an energy shock hits them twice: through higher import bills and through tighter global financial conditions as investors seek safety.
Economists note that forecasts of this kind carry wide margins of error, particularly when they depend on how long an energy disruption lasts. A shorter shock would allow growth to recover faster. A prolonged one could push weaker economies toward debt stress.
The UNCTAD outlook lands as finance ministers weigh how much support they can offer households without reigniting inflation. That balancing act, more than any single headline number, is likely to define the economic year ahead.
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