UN lowers global growth forecast
The United Nations has lowered its forecast for global economic growth in 2026, citing Middle East crises and rising oil prices as fresh risks to the global outlook.
Global GDP growth is now forecast at 2.5 per cent in 2026, down from 2.7 per cent in January.
UN economists said growth could fall to 2.1 per cent in a more adverse scenario, which would make it one of the weakest rates this century outside the COVID-19 pandemic and the 2008 global financial crisis.
Oil shock lifts inflation risk
The UN has also raised its inflation outlook, with global inflation now projected to rise to 3.9 per cent in 2026.
The revision follows US and Israeli airstrikes on Iran, with Iran responding by blocking the Strait of Hormuz, a critical waterway for oil, natural gas, fertiliser and other petroleum product shipments.
Shantanu Mukherjee, director of economic analysis in the UN Department of Economic and Social Affairs, said higher energy prices were a key factor, along with refinery product prices that are crucial to industrial production and commercial transport.
Developing economies face sharper squeeze
The UN said inflation would not be felt evenly across countries.
In richer developed countries, inflation is projected to rise from 2.6 per cent in 2025 to 2.9 per cent in 2026.
In developing countries, inflation is forecast to accelerate from 4.2 per cent to 5.2 per cent as higher costs for energy, transportation and imported goods erode real incomes.
The Associated Press
