Global Economy Slows in 2026 as Tariffs and Uncertainty Weigh on Growth: UN
“The UN projects slower global economic growth in 2026 as rising U.S. tariffs, geopolitical tensions, and trade uncertainty weigh on major and emerging economies worldwide.”
According to UN estimates, the world economy will grow at a slower pace in 2026 than it had initially estimated. The economic growth of the world in 2026 will be 2.7%, down from the previously forecasted growth of 2.8% in 2025, as estimated in the latest assessment made by the UN. The reason behind such growth is attributed to the adverse impacts of rising US tariffs and geopolitical tensions.
Although growth is expected to slightly improve to 2.9% in 2027, growth is still expected to come short in comparison to average growth rates that were registered at 3.2% between 2010 and 2019, prior to the COVID-19 pandemic that disrupted global economies. António Guterres, the United Nations’ secretary-general, said that “the contemporary economic environment is more vulnerable to new and social threats, given the economic stresses, geopolitical tensions, and technological development.
Overcoming Pressure of Trade with Resilience
The UN recognizes that with these challenges, the world economy has shown resilience. The reason it was able to do so, he says, is because of solid consumer spending, a decline in inflation in many major economies and continued investment-particularly in digital infrastructure and artificial intelligence-that cushioned last year’s sharply higher United States tariffs. Economists warn that the outlook is still vulnerable to further shocks because of underlying structural weaknesses.
The future of the United States, Europe and Japan
The weakness in residential and commercial construction was one of the main contributing factors that saw the economic growth of the United States slow down from 2.8% back in 2024 to 1.9% in 2025. Investments in AI and consumer demand will push growth up by 2% in 2026 and 2.2% in 2027.Growth in the European Union will be somewhat lower, easing from 1.5% in 2025 to 1.4% in 2026, under pressure from exports, with rising U.S. tariffs and geopolitical unpredictability. In 2027, the growth is forecasted to rebound to 1.6%.Economic growth in Japan is forecasted to reach 0.9% in 2026 and 1% in 2027, lower than the 2025 levels, due to the fact that United States trade policies and uncertainty weigh heavily on exports, particularly automobiles.
Developing and Emerging Economies
Regarding the number of developing countries, the UN remains more positive. With the mild easing of trade tensions with the US, it is estimated that China will expand 4.6% in 2026 and 4.5% in 2027. Indonesia and India are also estimated to maintain their strong growth momentum.The growth rate in least developed countries is also expected to accelerate from 3.9% in 2025 to 4.6% in 2026 and a growth rate of 5% in 2027.