The global economy is growing, but not fast enough. Output will expand by 2.7 percent this year—below last year’s 2.8 percent and well under the pre-pandemic average of 3.2 percent, according to a United Nations (UN) announced. The World Economic Situation and Prospects 2026 warns that higher US tariffs, tight budgets, and weak investment are holding back recovery, leaving many developing countries struggling to meet basic development targets.
The report comes as the world tries to navigate trade tensions and monetary shifts. Sharp tariff increases by the United States created friction in global commerce, though the lack of wider conflict helped prevent major disruptions. Still, the combined effect of higher tariffs and economic uncertainty is expected to weigh more heavily on growth this year.
Regional patterns are uneven. The US economy is forecast to grow by 2.0 percent, while the European Union faces a slowdown to 1.3 percent as exports suffer from tariffs and political instability. East Asia, led by China’s 4.6 percent expansion, will see growth ease to 4.4 percent. South Asia remains a bright spot, with India driving a 5.6 percent regional increase. Africa and Latin America face modest gains, but debt burdens and climate shocks threaten progress.
“Even as inflation recedes, high and still rising prices continue to erode the purchasing power of the most vulnerable,” said Junhua Li, UN Under-Secretary-General for Economic and Social Affairs. Headline inflation is projected to slow to 3.1 percent this year, down from 3.4 percent in 2025, yet prices remain a strain on households worldwide.
The report calls for stronger international cooperation to support countries facing debt, limited resources, and repeated external shocks. UN Secretary-General António Guterres warned that many developing economies “continue to struggle,” putting the Sustainable Development Goals at risk unless the global community acts decisively.
