The United Nations Conference on Trade and Development (UNCTAD) expects global economic growth to slow to 2.6% in 2026, from 2.9% last year, as the fallout from the Middle East crisis spreads to energy, trade and financial markets, according to its 2026 Trade and Development Report.
Energy supports the value of global trade
UNCTAD said higher energy prices, transport disruptions and market volatility are testing the resilience of the global economy, as disparities between different economies and regions widen.
The report forecast trade in goods and services to grow by about 4% in 2026, after the value of global trade reached a record $35 trillion in 2025.
UNCTAD said higher energy prices account for a significant part of the expected increase in the value of trade, meaning that strong headline figures do not necessarily reflect a comparable improvement in real economic activity.
At the same time, direct trade between China and the United States has fallen by more than 20% since 2024, while East Asian countries have expanded their trade ties with both China and North America.
UNCTAD warned that export controls, investment screening and requirements imposed on supply chains are making it more difficult for new companies and countries to enter strategic sectors.
Asia to account for about 59% of growth
The report forecast that Asia would account for about 59% of global economic growth in 2026, driven by the performance of a number of major and emerging economies.
UNCTAD forecast economic growth of 7.3% in India, 4.5% in China and 5.2% in Indonesia during the year.
By contrast, the report expects growth across developing economies to slow from 4.7% in 2025 to 4% in 2026, reflecting differences in their ability to withstand energy, financial and trade shocks.
Artificial intelligence supports trade but increases risks
Artificial intelligence-related products, led by semiconductors, have become key drivers of global goods trade.
But UNCTAD warned that the boom in this trade does not automatically translate into broad-based development gains, because technology, investment and productive capacity are concentrated in a limited number of countries and companies.
The report also flagged potential risks to financial stability as market performance becomes increasingly dependent on a narrow group of artificial intelligence-related companies, leaving them more vulnerable to a sharp correction in valuations.
International institutions offer differing forecasts
UNCTAD's estimates were less optimistic than those of the International Monetary Fund, which projects global economic growth of 3% in 2026 but has also warned of the fallout from the Iran war, trade fragmentation and the possibility of declining valuations for artificial intelligence companies.
The World Bank, meanwhile, expects global growth of 2.5%, with a possible decline to 1.3% in the worst-case scenario if the fallout from the Middle East war intensifies.
