The global economy is entering a more fragile period as geopolitical conflicts, rising energy costs and financial instability threaten growth and trade, according to UN News. In a new report released on Tuesday, the United Nations (UN) Conference on Trade and Development (UNCTAD) stated that the global economy remained resilient at the start of 2026, supported by trade, industrial production in developing countries and investment linked to artificial intelligence (AI). However, the report warns that geopolitical tensions have increasingly replaced trade tensions as the main source of instability. Energy markets, financial conditions and major shipping routes are being disrupted by conflict in the Middle East. The findings point to a slowdown ahead despite early-year momentum.
UNCTAD projects global growth will slow from 2.9 per cent in 2025 to 2.6 per cent in 2026, driven by higher oil prices, transport disruptions, market volatility and weaker investment demand. World merchandise trade growth is expected to fall sharply, from 4.7 per cent in 2025 to between 1.5 and 2.5 per cent in 2026. Developing economies are expected to face the greatest pressure, including rising fuel, food and fertilizer costs. Weaker currencies and tighter financing conditions add to the strain. Recent trade growth has been heavily concentrated in AI-related products such as semiconductors and data-processing equipment.
Humanitarian operations in Gaza are being squeezed by severe funding shortfalls, leaving more families without reliable access to food, shelter and essential services. According to the UN Office for the Coordination of Humanitarian Affairs (OCHA), the 2026 Flash Appeal seeking more than $4 billion to support nearly 3 million people across Gaza and the West Bank is only 12 per cent funded, with just $490 million received so far. The UN and its partners are supporting kitchens serving around 1 million meals per day in Gaza, down from 1.8 million in February. Aid agencies warn that one in five families is eating only once a day. Most of Gaza’s 2.1 million residents remain displaced.
In South Sudan, more than 304,000 people have been displaced in Jonglei state since conflict escalated in January, particularly in the counties of Uror, Nyirol, Ayod, Duk and Akobo. Nearly 79,000 people have since returned to their areas of origin, including more than 44,000 returning from Ethiopia’s Gambella region. The newly appointed head of the UN Mission in South Sudan (UNMISS), Anita Kiki Gbeho, said peacekeepers will remain in Akobo despite planned troop drawdowns.
“A cessation of hostilities and renewed commitment to implementing the Peace Agreement in both letter and spirit are urgently needed to restore public confidence and sustain progress,” she warned.
Tensions have eased in some areas, allowing humanitarian partners to support affected communities.
UN Secretary-General António Guterres condemned the deadly shooting at the Islamic Center of San Diego in the United States, which left three people dead on Monday. UN Spokesperson Stéphane Dujarric said the Secretary-General reaffirms that attacks on places of worship are particularly heinous and stresses the urgent need to confront hatred and intolerance in all their forms. Mr. Guterres extended condolences to the victims’ families and expressed solidarity with the Muslim community. He also called for a full investigation into the attack. UNCTAD, meanwhile, urged stronger international cooperation, more predictable trade policies and greater investment in renewable energy to reduce vulnerability to future global shocks.