UN Lowers 2026 Growth Forecast, Raises Inflation on Middle East Impact

The United Nations has lowered its forecast for global economic growth and raised its inflation projections for this year, citing the economic fallout from instability in the Middle East. The organization warned that developing nations are bearing the brunt of the impact.

In its latest World Economic Situation and Prospects Report, U.N. economists now forecast global GDP growth at 2.5 percent for 2026, a reduction from the 2.7 percent forecast in January. They cautioned that growth could fall to as low as 2.1 percent in a more adverse scenario. Shantanu Mukherjee, director of economic analysis in the U.N. Department of Economic and Social Affairs, stated that such a rate would be among the weakest this century, outside of the COVID-19 pandemic and the 2008 global financial crisis.

The report links the slowdown to higher energy prices and weaker global trade stemming from recent Middle East tensions. It specifically cited a blockade of the Strait of Hormuz, a critical waterway for oil, natural gas, and fertilizer shipments, following a series of airstrikes. Mukherjee noted that increased energy prices are a potent factor, as are the prices of refinery products crucial to...