UN lowers forecast for global economic growth in 2026
Responding to the crises in the Middle East and rising oil prices, the United Nations lowered its global economic growth forecast this year and raised inflation expectations.
Global GDP growth is forecast to fall to 2.5 percent for 2026 from 2.7 percent in January, and UN economists say growth could fall to just 2.1 percent in a “more adverse scenario.”
This would be one of the weakest growth rates this century, apart from the Covid-19 pandemic and the 2008 global financial crisis, Shantanu Mukherjee, director of economic analysis at the UN Department of Economic and Social Affairs, said at a press conference on Tuesday.
Global inflation is expected to rise to 3.9 percent in 2026, 0.8 percent above forecast in January before the United States and Israel launched airstrikes on Iran.
That country responded by closing the Strait of Hormuz, a critical waterway for the transportation of oil, natural gas, fertilizer and other petroleum products.
“Rising energy prices are a powerful factor, as are the prices of refinery products that are vital for industrial production and commercial transportation,” Mukherjee said.
However, he emphasized that not all countries will experience the same inflation rate.
Inflation in richer developed countries is expected to rise from 2.6 percent in 2025 to 2.9 percent in 2026.
Inflation is expected to rise from 4.2 percent to 5.2 percent in developing countries as high costs of energy, transportation and imported goods erode real incomes.
via Reuters
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