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<\/span><\/b><\/p>\nGlobal economy\u00a0shows resilience,\u00a0but\u00a0trade tensions and fiscal strains cloud outlook, UN warns<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n Declining\u00a0inflation and monetary easing offer relief,\u00a0yet\u00a0subdued investment and lingering uncertainties weigh\u00a0on global momentum.\u00a0\u00a0<\/em><\/p>\n New York,\u00a08\u00a0January<\/span><\/b>\u00a0<\/span>2026<\/span><\/b>\u00a0\u2013\u00a0Global\u00a0economic\u00a0output is forecast to grow by 2.7 per cent in 2026,\u00a0slightly\u00a0below the 2.8 per cent estimated for 2025 and well\u00a0below\u00a0the pre-pandemic average of 3.2 per cent, according to the\u00a0<\/span>World Economic Situation and Prospects 2026<\/span><\/i>, released\u00a0by the Â鶹APP\u00a0today.\u00a0<\/span>\u00a0<\/span><\/p>\n During\u00a02025, unexpected resilience to sharp increases in U.S. tariffs, supported by solid consumer spending and easing inflation, helped sustain growth.\u00a0<\/span>However,\u00a0underlying weaknesses persist. Subdued investment and limited fiscal space are\u00a0weighing on\u00a0economic activity, raising the prospect that\u00a0the\u00a0world economy could settle into a persistently slower growth path than in the pre-pandemic era.\u00a0<\/span>\u00a0<\/span><\/p>\n The report notes that\u00a0a partial\u00a0easing of\u00a0trade tensions\u00a0helped limit disruptions to international commerce. However, the impact of higher tariffs, coupled with elevated macroeconomic uncertainties, is\u00a0expected to\u00a0become more\u00a0evident\u00a0in 2026.\u00a0<\/span>Financial conditions have eased amid monetary loosening and improved sentiment, but risks\u00a0remain\u00a0high\u00a0given\u00a0stretched valuations\u2014especially in sectors linked to rapid advances in artificial intelligence. Meanwhile, high debt levels and borrowing costs are\u00a0constraining\u00a0policy space, especially\u00a0for many developing economies.<\/span>\u00a0<\/span><\/p>\n \u201cA combination of economic, geopolitical and technological tensions is reshaping the global landscape, generating new economic uncertainty and social vulnerabilities,\u201d\u00a0said Â鶹APP Secretary-General Ant\u00f3nio Guterres. \u201cMany developing economies continue to struggle and, as a result, progress towards the Sustainable Development Goals remains distant for much of the world.\u201d<\/span>\u00a0<\/span><\/p>\n Regional\u00a0economic\u00a0outlook:\u00a0expansion\u00a0broadly steady,\u00a0but uneven\u00a0<\/span><\/i><\/b>\u00a0<\/span><\/p>\n Economic growth in the United States is projected at 2.0 per cent in 2026,\u00a0compared to 1.9 per cent in 2025,\u00a0supported by\u00a0monetary and fiscal easing. However,\u00a0a\u00a0softening\u00a0labour market\u00a0will\u00a0likely\u00a0weigh\u00a0on\u00a0momentum. In the European Union,\u00a0economic\u00a0growth is\u00a0forecast\u00a0at 1.3 per cent\u00a0in 2026,\u00a0down from\u00a01.5 per cent in 2025,\u00a0as higher U.S. tariffs and\u00a0ongoing geopolitical uncertainty\u00a0dampen\u00a0exports. Output in Japan\u00a0is expected to\u00a0expand by\u00a00.9 per cent\u00a0in 2026,\u00a0compared with\u00a01.2 per cent in 2025,\u00a0with\u00a0a\u00a0modest domestic recovery\u00a0partly offsetting\u00a0weaker external conditions.\u00a0In the Commonwealth of Independent States and Georgia, growth is projected at 2.1 per cent in 2026,\u00a0mostly\u00a0unchanged from\u00a02025,\u00a0even\u00a0as\u00a0the war in Ukraine\u00a0continues to\u00a0weigh on\u00a0macroeconomic conditions.\u00a0<\/span>\u00a0<\/span><\/p>\n In East Asia, growth is projected at 4.4 per cent in 2026, down from 4.9 per cent in 2025 as the boost from front-loaded exports fades. China\u2019s economy\u00a0is expected to grow by 4.6 per cent, slightly\u00a0lower than in 2025,\u00a0supported by targeted policy measures. In South Asia, growth\u00a0is forecast at\u00a05.6 per cent\u00a0in 2026,\u00a0easing from 5.9 per cent, led by India\u2019s 6.6 per cent expansion, driven by\u00a0resilient consumption and\u00a0substantial\u00a0public investment.\u00a0\u00a0In Africa, output is\u00a0projected\u00a0to grow by\u00a04.0 per cent in 2026, marginally up from 3.9 per cent in 2025. However,\u00a0high debt and climate-related shocks\u00a0pose significant risks.\u00a0In Western Asia, GDP is\u00a0expected to grow by\u00a04.1 per cent in 2026,\u00a0up\u00a0from 3.4 per cent in 2025, yet the region\u00a0remains\u00a0exposed to geopolitical tensions and security risks. In Latin America and the Caribbean, output\u00a0is expected to\u00a0expand by 2.3\u00a0per cent\u00a0in 2026, slightly down from 2.4 per cent in\u00a02025,\u00a0amid\u00a0moderate\u00a0growth in consumer demand\u00a0and a\u00a0mild\u00a0recovery in investment.<\/span>\u00a0<\/span><\/p>\n International trade\u00a0facing\u00a0headwinds; investment\u00a0remains\u00a0subdued<\/span><\/i><\/b>\u00a0<\/span><\/p>\n Global trade proved resilient in 2025,\u00a0expanding by\u00a0a faster-than-expected 3.8 per cent despite elevated policy uncertainty and rising tariffs. The expansion\u00a0was driven by\u00a0the\u00a0front-loading of shipments early in the year and robust growth in services trade. However, momentum is expected to ease, with trade growth projected to slow to 2.2 per cent in 2026.\u00a0<\/span>\u00a0<\/span><\/p>\n At the same time, investment\u00a0growth has\u00a0remained\u00a0subdued\u00a0in most regions, weighed down by geopolitical tensions and tight fiscal conditions. Monetary easing and\u00a0targeted\u00a0fiscal\u00a0measures\u00a0have\u00a0supported\u00a0investment in some economies,\u00a0while\u00a0rapid advances in artificial intelligence\u00a0fuelled\u00a0pockets of strong capital spending in\u00a0a few large\u00a0markets.\u00a0The report\u00a0cautions, however,\u00a0that\u00a0the\u00a0potential gains from AI, when realised, are\u00a0likely to\u00a0be\u00a0unevenly distributed,\u00a0risking a widening of\u00a0existing structural inequalities.<\/span>\u00a0<\/span><\/p>\n Inflation\u00a0continues to\u00a0slow, yet\u00a0strains to\u00a0the\u00a0cost of living persist\u00a0<\/span><\/i><\/b>\u00a0<\/span><\/p>\n The report\u00a0also\u00a0underscores that\u00a0high prices\u00a0remain\u00a0a key\u00a0global\u00a0challenge\u00a0even as\u00a0disinflation continued. Headline inflation\u00a0declined\u00a0from\u00a04.0 per cent in 2024\u00a0to an estimated 3.4 per cent\u00a0in 2025\u00a0and\u00a0is\u00a0projected to slow further to 3.1\u00a0per cent in 2026. While\u00a0overall\u00a0inflation has moderated, elevated\u00a0prices\u00a0continue to\u00a0weigh on\u00a0real incomes. Unlike the globally synchronized surge of\u00a0previous years,\u00a0<\/span>inflation trends have become\u00a0more\u00a0uneven, shaped by recurring supply\u00a0bottlenecks\u00a0amid\u00a0rising geopolitical and\u00a0climaterelated\u00a0risks.\u00a0<\/span>\u00a0<\/span><\/p>\n Policymakers face an\u00a0increasingly complex\u00a0inflation landscape, where supply\u00a0risks\u00a0call for\u00a0a more coordinated and forward-looking approach. Monetary policy\u00a0remains\u00a0central\u00a0but\u00a0needs to work\u00a0with credible\u00a0fiscal frameworks and targeted social measures to\u00a0protect vulnerable groups.\u00a0Sectoral polices\u00a0also play a role\u00a0by expanding productive capacity and strengthening supply chains, especially in food,\u00a0energy\u00a0and\u00a0logistics.\u00a0Coordinated action across monetary,\u00a0fiscal\u00a0and industrial policies will be\u00a0critical\u00a0to managing\u00a0persistent price pressures without\u00a0compromising\u00a0social stability or long-term growth.<\/span>\u00a0<\/span><\/p>\n \u201cEven as inflation recedes, high\u00a0and still rising\u00a0prices\u00a0continue to erode the purchasing power of the most vulnerable,\u201d said Li Junhua, Â鶹APP Under-Secretary-General for Economic and Social Affairs. \u201cEnsuring that\u00a0lower inflation translates into real improvements for households requires\u00a0safeguarding\u00a0essential\u00a0spending, strengthening\u00a0market\u00a0competition,\u00a0and tackling the structural drivers of recurring\u00a0price shocks.\u201d<\/span>\u00a0<\/span><\/p>\n Call for\u00a0renewed\u00a0multilateral\u00a0action<\/span><\/i><\/b>\u00a0<\/span><\/p>\n The report underscores that navigating an era of trade realignments, persistent price pressures, and climate-related shocks will demand deeper global coordination and decisive collective action at a time when geopolitical tensions are rising, policies are becoming more inward-looking, and\u00a0impetus towards\u00a0multilateral solutions is weakening. Sustained progress will depend on rebuilding trust, strengthening predictability, and renewing the commitment to an open, rules-based multilateral trading system.<\/span>\u00a0<\/span><\/p>\n The\u00a0<\/span>Sevilla Commitment<\/span>,<\/span>\u00a0<\/span>the outcome document of the\u00a0<\/span>Fourth International Conference on Financing for Development<\/span><\/a>,\u00a0offers a forward-looking blueprint to strengthen multilateral cooperation, reform the international financial architecture,\u00a0and scale up development finance.\u00a0<\/span>Delivering on\u00a0its key\u00a0priorities\u2014including\u00a0clearer debt workout modalities and expanded concessional and climate\u00a0finance\u2014is\u00a0essential to reducing systemic risks and fostering\u00a0a more stable and\u00a0equitable\u00a0global economy.\u00a0<\/span>\u00a0<\/span><\/p>\n ~<\/span>\u00a0<\/span><\/p>\n The\u00a0<\/span>World Economic Situation and Prospects 2026<\/span><\/i>\u00a0will be available on\u00a08\u00a0January, 12:45\u00a0pm\u00a0EST at\u202f<\/span>desapublications.un.org<\/span><\/a>.<\/span>\u00a0<\/span><\/p>\n