Global economic growth will likely slow to 2.6 per cent in 2026, down from 2.9 per cent last year. The UN trade agency UNCTAD blamed the energy shock from the Middle East crisis.The agency said trade in goods and services should expand by 4 per cent in constant prices. Global trade reached a record 35 trillion dollars in 2025, but the projected rise is driven mainly by higher energy prices.Asia will remain the engine of growth.

UNCTAD expects the region to contribute 59 per cent of global growth in 2026, with India expanding at 7.3 per cent, China at 4.5 per cent and Indonesia at 5.2 per cent.Trade between China and the United States has fallen by more than 20 per cent since 2024, the agency said. AI products such as semiconductors are the main driver of merchandise trade, but the agency warned this does not automatically bring broad development gains.The World Bank forecast growth of 2.5 per cent in June, while the IMF is slightly more optimistic at 3 per cent. Both institutions flagged the Iran war, trade fragmentation and AI risks.