A U.N. press release summarizing the mid-year update to the global body's World Economic Situation and Prospects, opens new tab said.
Global GDP growth is forecast at 2.5% in 2026, compared with an estimated 3.0% in 2025, 0.2 percentage points below the January projection and well below pre-pandemic growth rates.
A modest recovery is projected at 2.8% in 2027.
Solid labor markets, resilient consumer demand, and AI-driven trade and investment are expected to provide support, but the downgrade underscores a further weakening of a subdued global outlook.
Surge in energy prices has delivered windfall gains for energy companies, but intensified cost pressures for households and businesses.
In developed economies, inflation is forecast to rise from 2.6 % in 2025 to 2.9% in 2026 and in developing economies from 4.2% to 5.2%.
Fertilizer supplies have been disrupted, pushing up costs, which could reduce crop yields, putting upward pressure on food prices.
Global financial markets have remained resilient, but inflation expectations have driven short-term bond yields higher.
The most severe damage is in Western Asia, where growth is projected to plunge from 3.6% to 1.4%, exacerbated by damage to infrastructure, trade, and tourism.
The United States is expected to remain comparatively resilient, with growth projected at 2.0 % in 2026, broadly steady from 2025 on strong household demand and tech investment.
Europe is more exposed, with reliance on imported energy straining households and businesses. EU growth is projected to slow from 1.5% to 1.1% and in Britain from 1.4% to 0.7%.
China's diversified energy mix, sizable strategic reserves, and policy support are providing a buffer, with its growth projected to moderate from 5.0 % to 4.6 %.
India's output is still expected to expand by 6.4 % against 7.5%.
In Africa, average growth is projected to ease slightly, from 4.2% to 3.9%.
