New York | January 12, 2026
The global economy is expected to expand at 2.7% in 2026, marking a slight slowdown from 2025’s 2.8% and remaining below pre-pandemic averages, according to the United Nations’ World Economic Situation and Prospects (WESP) 2026 report released Monday.
UN economists describe the outlook as “steady but subdued,” noting that while the global recovery continues, it lacks strong momentum due to persistent geopolitical tensions, softening labor markets, and weakening international trade.
US, China, and South Asia Lead Uneven Global Landscape
The report highlights significant regional variations:
United States:
Projected to grow 2.0% in 2026, supported by easing monetary policies and stabilized labor conditions.China:
Expected GDP growth: 4.6%, driven by consumption, targeted stimulus, and recovery in manufacturing.South Asia:
Forecast to expand 5.6%, with India remaining the region’s primary growth driver through resilient domestic demand and strong services activity.
Global Inflation Slowing, But Risks Remain
Headline inflation is projected to fall to 3.1% in 2026, the lowest since before the pandemic.
However, the UN warns that price pressures remain elevated in emerging and developing economies, where food and energy costs continue to strain households.
Labor markets, particularly in advanced economies, show signs of cooling as job creation slows, wage growth stabilizes, and consumer spending moderates.
Trade Tensions and Geopolitical Risks Could Weigh on Recovery
The WESP 2026 report underscores several major risks:
Intensifying global trade disputes
Ongoing geopolitical conflicts
Weak productivity growth
Limited fiscal space in low-income nations
UN economists caution that these vulnerabilities could drag global growth below current projections if they escalate.
UN: Recovery Will Continue, But Without Strong Momentum
Despite the headwinds, the UN outlook remains cautiously optimistic, noting that supportive monetary policies, easing supply-chain pressures, and improving inflation trends provide some buffer.
However, the organization stresses that stronger international cooperation, targeted fiscal reforms, and investment in sustainable development are necessary to bolster long-term global resilience.
