The United Nations on May 19 lowered the global GDP growth forecast for 2026 to 2.5%, down from 2.7% projected in January and below the expected 3.0% growth for 2025 [1, 2, 3]. The downgrade reflects the impact of the Middle East crisis, which began with the war started by the US and Israel on February 28 and created energy market shocks along with inflationary pressures worldwide [1]. "What began as a 'blow to energy markets'... had turned into a 'broader supply shock of uncertain scope, magnitude and duration that is rippling across the world,'" said Shantanu Mukherjee, Director of Economic Analysis at UN DESA [1]. Mukherjee also noted the considerable uncertainty weighs heavily on the global economy.

The growth outlook for Western Asia was cut sharply to 1.4% for 2026, down from about 3.6-4.1%, reflecting major disruptions in infrastructure, trade, and tourism caused by the crisis [1, 2, 3]. Developing countries overall face a deeper hit, with their 2026 growth forecast 1.3 percentage points below their pre-pandemic average, compared to 0.7 points below globally [1]. Regions including the Caribbean, West Africa, Central Africa, and South-Eastern Europe also saw downgraded outlooks, along with the UK [1, 2, 3].

Economies like China and India have also seen downward revisions. China’s 2026 growth forecast dropped from around 5.0% to 4.6%, partly cushioned by energy diversification and reserves [1, 2, 3]. India’s forecast fell from 7.5% to 6.4% [2, 3]. The EU’s growth is expected to slow from 1.5% to 1.1%, while the UK is projected to grow just 0.7% in 2026, down from 1.4%, impacted by energy import dependencies [2, 3]. The US forecast remains steady at about 2.0% thanks to resilient consumption and investment [1, 2, 3]. Inflation is expected to rise from 2.6% to 2.9% in developed economies and from 4.2% to 5.2% in developing economies in 2026 [2, 3].

The UN also cautioned that global growth could fall further to 2.1% if supply shocks continue longer than expected [1]. The 2027 global growth projection stands at 2.8% [1, 2, 3]. The UN’s updated forecast highlights ongoing pressure from geopolitical tensions and market volatility as key risks to the world economy.

The next major economic outlook update is expected in early 2027, when the UN will reassess conditions and refine growth estimates based on evolving geopolitical and economic factors.