The United Nations has lowered its forecast for global economic growth and raised its inflation projections for this year, in response to the crisis in the Middle East and rising oil prices.
UN economists say global GDP growth is now expected at 2.5% in 2026, up from 2.7% in January, and could fall to just 2.1% “in a more unfavorable scenario.”
That would be one of the slowest growth rates this century, outside of the COVID-19 pandemic and the 2008 global financial crisis, said Shantanu Mukherjee, director of economic analysis at the UN Department of Economic and Social Affairs.
“We are not close” to a recession, he assured, while warning that life could become more complicated for billions of people and that some countries could see their economies contract.
Global inflation is expected to reach 3.9% this year, 0.8 points higher than forecast in January, before the United States and Israel launched airstrikes against Iran. Iran responded by blocking the Strait of Hormuz, a key shipping route for the transport of oil, natural gas, fertilizers and other petroleum products.
“Rising energy prices are a powerful factor, as are those of refined products that are essential for industrial production and commercial transportation,” Mukherjee said.
Not all countries will experience the same inflation, he insisted. In the richest developed economies, inflation is expected to increase from 2.6% in 2025 to 2.9% in 2026.
In developing countries, it is expected to accelerate from 4.2% to 5.2%, as rising costs of energy, transport and imported goods eat into real incomes.
The impact of the war in Iran is very uneven, with the most serious economic damage concentrated in West Asia – a region that brings together 21 Arab countries, including those in the Persian Gulf – according to the “Situation and Prospects of the World Economy” report in mid-2026.
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In this region, economic growth is expected to fall from 3.6% in 2025 to 1.4% in 2026, “under the effect not only of the energy shock, but also of direct damage inflicted on infrastructure and serious disruptions in oil production, trade and tourism.”
In Africa, average growth is expected to decline only slightly, from 4.2% last year to 3.9% this year. In Latin America and the Caribbean, it is expected to slow from 2.5% to 2.3%.
The United States economy is expected to remain “relatively resilient”, with growth of 2% expected this year, a level broadly in line with that of 2025.
Europe, conversely, “is more exposed, its strong dependence on imported energy putting households and businesses under pressure.” Economic growth in the EU is expected to slow from 1.5% in 2025 to 1.1% in 2026, while that of the UK is expected to decline further, from 1.4% last year to 0.7% this year.
In Asia, the diversification of China’s energy mix, the importance of its strategic reserves and the support of public authorities play a shock-absorbing role, with economic growth expected to slow only from 5% in 2025 to 4.6% this year.
India is expected to remain one of the fastest growing major economies, with an expansion of 6.4% forecast this year, up from 7.5% in 2025.
“For China, as for India and other countries, the question is how long this conflict and its effects will last, because all of these different shock absorbers are clearly limited,” said UN chief economist Ingo Pitterle.
This text was translated with the help of artificial intelligence. Report a problem: [feedback-articles-fr@euronews.com].
