The United Nations has revised its global economic growth forecast downward for 2026, citing escalating Middle East tensions and surging oil prices. In its latest report released on Tuesday, UN economists projected global GDP growth of 2.5% for the year, a decrease from the 2.7% estimate made in January. They warned that under a more adverse scenario, growth could plunge to just 2.1%.
Weakest Growth This Century Outside Crises
Shantanu Mukherjee, director of economic analysis at the UN Department of Economic and Social Affairs, described this as potentially one of the weakest growth rates this century, excluding the COVID-19 pandemic and the 2008 global financial crisis. Speaking at a news conference, he highlighted the severity of the situation.
Inflation on the Rise
Global inflation is now projected to reach 3.9% in 2026, a significant 0.8 percentage point increase from the January forecast. This revision follows airstrikes by the United States and Israel on Iran, which prompted Tehran to block the Strait of Hormuz—a vital chokepoint for oil, natural gas, fertilizer, and other petroleum product shipments.
"Increased energy prices are a potent factor, as are the prices of refinery products that are crucial to industrial production and commercial transport," Mukherjee explained.
Divergent Impact on Economies
The UN stressed that inflation will not affect all countries uniformly. In wealthier developed nations, inflation is expected to rise from 2.6% in 2025 to 2.9% in 2026. Meanwhile, developing countries face a steeper climb, with inflation forecast to accelerate from 4.2% to 5.2%, as higher costs for energy, transportation, and imported goods erode real incomes.
