UNCTAD Expects Global Economic Growth to Slow Amid Geopolitical Risks
Geneva, May 20 (QNA) – The United Nations Organization for Trade and Development (UNCTAD) has warned that geopolitical risks are now the dominant source of instability facing the global economy, predicting that global growth will slow from 2.9 percent in 2025 to 2.6 percent in 2026, with increasing pressures from rising energy prices, transportation disruptions, market volatility, and the growing search for safe financial assets.
The organization warned that developing economies are the most vulnerable to these risks, as many face rising costs for fuel, food, and fertilizer while also confronting currency pressures, tighter financing conditions, and declining investor confidence. It noted that the global economy derived much of the resilience it demonstrated in 2025 from the growing role of developing economies in global trade and growth, but warned that prolonged instability now threatens to undermine this momentum.
UNCTAD explained, in its recently issued report entitled “Trade and Development Foresights 2026: Global economy faces a geopolitical challenge” that global trade in goods maintained its relative strength during the beginning of 2026, but a large part of this momentum was concentrated in products related to artificial intelligence. Outside these sectors, trade growth has remained much more modest, particularly in traditional industries and commodity-related sectors.
The report also highlighted the increasing pressures on global food systems, noting that high energy prices lead to increased fertilizer costs, which increases food inflation pressures in many developing economies.
UNCTAD warned that food security has also become a growing concern for financial stability, particularly for governments already facing higher debt servicing costs.
UNCTAD called for strengthening international cooperation, improving trade conditions, providing greater financial guarantees to developing economies, and accelerating the pace of investment in clean energy at affordable prices, in order to stabilize growth and reduce vulnerability to future shocks. (QNA)
