The United Nations Conference on Trade and Development, or UNCTAD, expects global economic growth to slow to 2.6 percent in 2026, from 2.9 percent last year, as the fallout from the Middle East crisis spreads to energy, trade and financial markets.
In its 2026 Trade and Development Report, UNCTAD said higher energy prices, transport disruptions and market volatility are testing the resilience of the global economy, as gaps widen between different economies and regions.
Energy supports the value of global trade
The report expects trade in goods and services to grow by about four percent in 2026, after the value of global trade reached a record $35 trillion in 2025.
UNCTAD said higher energy prices account for a significant share of the expected increase in trade value, meaning the strength of the figures does not necessarily reflect a comparable improvement in real economic activity.
Direct trade between China and the United States has fallen by more than 20 percent 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 supply-chain requirements are making it more difficult for new companies and countries to enter strategic sectors.
Asia to contribute about 59 percent of growth
Asia is expected to contribute about 59 percent of global economic growth in 2026, driven by the performance of several major and emerging economies. UNCTAD expects India's economy to grow by 7.3 percent, China's by 4.5 percent and Indonesia's by 5.2 percent during the year.
By contrast, the report expects growth across developing economies as a group to slow from 4.7 percent in 2025 to four percent in 2026, reflecting differences in their ability to withstand energy, financing and trade shocks.
Artificial intelligence supports trade but raises market risks
Artificial intelligence-related products, led by semiconductors, have become major drivers of global goods trade. But UNCTAD warned that a boom in this trade does not automatically produce broad-based development gains because technology, investment and production capacity are concentrated in a limited number of countries and companies.
UNCTAD also highlighted potential risks to financial stability as market performance becomes increasingly dependent on a narrow group of artificial intelligence-related companies, leaving markets more vulnerable to a sharp correction in valuations.
Global growth forecasts diverge
UNCTAD's estimates are less optimistic than those of the International Monetary Fund, which forecasts global economic growth of three percent in 2026 while warning of the fallout from the Iran war, trade fragmentation and the possibility of declining valuations for artificial intelligence companies.
The World Bank expects global growth of 2.5 percent, with a possible decline to 1.3 percent in the worst-case scenario if the fallout from the Middle East war worsens.
