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Published : 09 Jan 2026, 12:07 AM
Global economic growth is forecast to decline to 2.7 percent in 2026 from 2.8 percent last year before increasing to 2.9 percent in 2027 - still down from the pre-pandemic average of 3.2 percent between 2010 and 2019, according to a United Nations report released on Thursday.
The World Economic Situation and Prospects report said that while a sharp increase in US tariffs in 2025 created new trade tensions, the absence of broader escalation has helped limit disruptions to international commerce.
"Despite the tariff shock, global economic activity proved resilient, supported by front-loaded shipments, inventory accumulation,and solid consumer spending amid monetary easing and broadly stable labor markets," according to the report by the UN Department of Economic and Social Affairs.
"Continued macroeconomic policy support is expected to cushion the impact of higher tariffs, but growth in trade and overall activity are likely to moderate in the near term," it said.
US ECONOMIC GROWTH SEEN UP SLIGHTLY
The report said economic growth in the United States slowed to 1.9 percent in 2025 - from 2.8 percent in 2024 - and was forecast to edge up to 2.0 percent in 2026 and 2.2 percent in 2027, aided by expansionary fiscal and monetary policies. It said inflation would likely remain above the 2 percent target in 2026, "though it should gradually moderate as tariff effects wane and housing costs stabilise."
In China, the economy was projected to grow by 4.6 percent in 2026 and 4.5 percent in 2027, down from an estimated 4.9 percent expansion in 2025.
"A temporary easing of trade tensions with the United States - including targeted tariff reductions and a one-year trade truce - has helped stabilise confidence, while policy support is expected to sustain domestic demand," the report said.
Growth in the European Union was forecast at 1.3 percent in 2026 and 1.6 percent in 2027 - compared with 1.5 percent in 2025 - driven by resilient consumer spending. But higher US tariffs and geopolitical uncertainty are likely to weigh on exports, the report said.
It said growth in South Asia was due to moderate to 5.6 percent in 2026, from 5.9 percent in 2025. It was forecast to return to 5.9 percent in 2027.
"India, growth is estimated at 7.4 percent for 2025 and forecast at 6.6 percent for 2026 and 6.7 percent for 2027, supported by resilient consumption and strong public investment, which should largely offset the adverse impact of higher United States tariffs," the report said.
