UNCTAD forecasts global growth to slow to 2.6% in 2026 as developing economies decelerate

UNCTAD and the WTO project global economic growth to slow to 2.6% in 2026, down from 2.9% in 2025, as developing economies decelerate and energy shocks from the Middle East conflict weigh on activity. However, a massive boom in artificial intelligence investments is driving a surge in global merchandise trade, prompting the WTO to raise its trade growth forecast to 3.9%. This expansion remains highly concentrated, with developed nations capturing 70% of strategic greenfield projects while US-China trade has fallen by over 20% since 2024.

Global economic growth projections

• ▪The World Trade Organization projected that global gross domestic product will grow by 2.6% in 2026 and by 2.9% in 2027.
• ▪The International Monetary Fund projected a 3% global economic growth forecast for 2026, flagging the Iran war, trade fragmentation, and artificial intelligence corrections as risks.
• ▪The World Bank in June 2026 cut its global economic growth forecast to 2.5% due to the Middle East conflict, warning growth could drop to 1.3% in a worst-case scenario.
• ▪The United Nations Conference on Trade and Development projected that global economic growth will slow to 2.6% in 2026, down from 2.9% in 2025.

Developing world growth

• ▪The United Nations Conference on Trade and Development reported that growth in the developing world is bifurcating, with a few large economies driving global expansion.
• ▪The United Nations Conference on Trade and Development projected that global economic growth will slow to 2.6% in 2026, down from 2.9% in 2025.

UNCTAD economic projections for Asia

• ▪The United Nations Conference on Trade and Development projected that India will grow at 7.3%, China by 4.5%, and Indonesia by 5.2% in 2026.
• ▪The United Nations Conference on Trade and Development projected that global economic growth will slow to 2.6% in 2026, down from 2.9% in 2025.

Closing the income gap

• ▪The United Nations Conference on Trade and Development stated that income convergence with advanced nations has stalled across most of the developing world since the mid-2010s.
• ▪The United Nations Conference on Trade and Development reported that only a few developing Asian economies continue to close the income gap with advanced countries.

UNCTAD global trade statistics

• ▪The United Nations Conference on Trade and Development reported that global trade reached a record $35 trillion in 2025.
• ▪The United Nations Conference on Trade and Development reported that global trade is expected to expand by about 4% in 2026, down from 4.4% in 2025.

WTO trade forecasts and artificial intelligence

• ▪The World Trade Organization reported that demand for artificial intelligence-enabling goods, such as semiconductors and servers, accounted for 47% of global merchandise trade growth in the first half of 2026.
• ▪The World Trade Organization increased its 2026 merchandise trade growth forecast to 3.9%, up from its March 2026 prediction of 1.9%, driven by artificial intelligence investments.

Shifts in bilateral and regional trade

• ▪East Asia has expanded its trade with both China and North America since 2024, according to the United Nations Conference on Trade and Development.
• ▪Trade between China and the United States has fallen by more than 20% since 2024, according to the United Nations Conference on Trade and Development.

Barriers and concentration in strategic sectors

• ▪The United Nations Conference on Trade and Development reported that export controls, investment screening, and supply-chain conditions are making strategic sectors harder for new entrants to access.
• ▪Developed economies captured approximately 70% of the value of announced greenfield projects in high-value strategic sectors, including semiconductors and artificial intelligence infrastructure, between 2020 and 2025.

Debatable claims

• ▪The AI investment boom will fail to deliver broad economic development to the Global South
• ▪National security concerns justify the increasing use of unilateral trade barriers and investment screenings