Global economic growth will likely slow to 2.6 percent in 2026, down from 2.9 percent in 2025, as an energy shock stemming from the Middle East crisis tests the world economy, the United Nations trade and development agency said on Friday.
In its trade and development report, UNCTAD said trade in goods and services is expected to expand 4 percent in constant prices, following a year in which global trade hit a record $35 trillion in 2025. But it cautioned that the increase is being driven in part by higher energy prices rather than volume growth.
A fragmented trade map
Trade between China and the United States has fallen by more than 20 percent since 2024, the agency said, underlining the fragmentation of global commerce. Asia is projected to contribute 59 percent of world growth, with India expected to grow 7.3 percent, China 4.5 percent and Indonesia 5.2 percent.
The AI boom's double edge
UNCTAD identified artificial intelligence products, led by semiconductors, as the main driver of merchandise trade, but warned that AI-related trade does not automatically translate into broad development gains. It also flagged financial-stability risks from the AI boom, as equity markets concentrate ever more value in a handful of companies.
The agency's forecast sits between the World Bank's June estimate of 2.5 percent (with a worst-case scenario of 1.3 percent) and the IMF's 3 percent, which has itself flagged the Iran conflict, trade fragmentation and the risk of an AI correction.
Sources:
- Reuters: World economic growth to slow to 2.6% in 2026, UN trade body says
In its trade and development report, UNCTAD said trade in goods and services is expected to expand 4 percent in constant prices, following a year in which global trade hit a record $35 trillion in 2025. But it cautioned that the increase is being driven in part by higher energy prices rather than volume growth.
A fragmented trade map
Trade between China and the United States has fallen by more than 20 percent since 2024, the agency said, underlining the fragmentation of global commerce. Asia is projected to contribute 59 percent of world growth, with India expected to grow 7.3 percent, China 4.5 percent and Indonesia 5.2 percent.
The AI boom's double edge
UNCTAD identified artificial intelligence products, led by semiconductors, as the main driver of merchandise trade, but warned that AI-related trade does not automatically translate into broad development gains. It also flagged financial-stability risks from the AI boom, as equity markets concentrate ever more value in a handful of companies.
The agency's forecast sits between the World Bank's June estimate of 2.5 percent (with a worst-case scenario of 1.3 percent) and the IMF's 3 percent, which has itself flagged the Iran conflict, trade fragmentation and the risk of an AI correction.
Sources:
- Reuters: World economic growth to slow to 2.6% in 2026, UN trade body says
