Global Growth to Slow to 2.6% Amid Energy Crisis, UNCTAD Reports
Global economic growth is expected to slow to 2.6% in 2026, down from 2.9% last year, according to a UNCTAD report. The energy crisis, exacerbated by the Middle East conflict, has driven up prices and particularly impacted developing nations. Despite a slowdown in overall growth, global trade reached a record $35 trillion last year and is projected to grow by 4% this year, with Asia expected to contribute 59% of global growth.
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- Global economic growth is projected to slow to 2.6% in 2026, down from 2.9% last year.
- The energy crisis, fueled by the Middle East conflict, has significantly increased oil prices.
- Developing economies and poor households are disproportionately affected by rising energy costs and other financial pressures.
- Global trade in goods and services reached a record $35 trillion last year and is expected to grow by 4% this year.
- Asia is forecast to contribute 59% of global growth in 2026, with India and Vietnam showing strong projections.
- Profits from AI products are highly concentrated, with workers receiving a small fraction of the value-added.
Global economic growth is projected to slow to 2.6% this year, down from 2.9% in the previous year, according to the UN Conference on Trade and Development's (UNCTAD) 2026 Trade and Development Report, released Thursday in Geneva. Developing economies are expected to grow at 4%, a decrease from 4.7% in 2025. UNCTAD forecasts global growth to reach 2.7% in 2027.
Despite the slowdown in overall growth, global trade in goods and services reached a record $35 trillion last year and is expected to increase by approximately 4% in real terms this year. However, a portion of this value increase is attributed to rising prices driven by the energy crisis. Trade patterns are shifting, with trade between China and the United States declining by over 20% since 2024, while East Asia has expanded trade with both China and North America.
The report highlights that the conflict in the Middle East caused Brent crude oil prices to surge from around $70 to over $110 per barrel in the weeks following its outbreak. This energy price hike has disproportionately affected developing nations reliant on imports and low-income households, exacerbating challenges already posed by rising credit costs and doubled capital flow volatility since the conflict began. Furthermore, official development assistance to poorer countries is expected to fall by nearly 7% this year, marking the third consecutive year of decline.
Asia is anticipated to contribute 59% of global growth this year, with India projected at 7.3%, Vietnam at 7.8%, Indonesia at 5.2%, and China at 4.5%. The report identifies artificial intelligence products as a primary driver of goods trade, but notes a significant concentration of profits, with post-tax earnings accounting for 68% of value-added in advanced AI server systems, while workers receive less than 15%. Developed countries are capturing about 70% of the value from new projects in strategic sectors like chips and AI infrastructure.
"The rising economies of the Global South are becoming regional anchors," stated Pedro Manuel Moreno, Acting Secretary-General of UNCTAD, emphasizing that this trend functions best within a multilateral trading system upholding non-discrimination.
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