Global economy to grow 2.7% in 2026: UN

By Gokhan Ergocun

ISTANBUL (AA) - The UN forecast Thursday that the global economy is expected to grow 2.7% in 2026, falling from 2.8% in the previous analysis.

The UN's World Economic Situation and Prospects 2026 report also forecasts that the world economy will drop 2.9% in 2027.

The report states that the global economy is showing resilience, but warns that trade tensions and financial difficulties are casting a shadow over the outlook.

The UN stated that the unexpected resilience seen last year against sharp increases in US tariffs helped sustain growth, supported by strong consumer spending and slowing inflation, but underlying weaknesses persisted.

The report noted that weak investment and limited fiscal space are putting pressure on economic activity and increasing the likelihood that the global economy could settle into a permanently slower growth path compared to the pre-pandemic period.

The partial easing of trade tensions has helped limit disruptions in international trade, it said, adding that the effect of high tariffs is expected to become more pronounced in 2026 amid increasing macroeconomic uncertainty.

Financial conditions have eased with monetary easing and improved market sentiment, but risks remain high, particularly due to high valuations in sectors linked to rapid developments in AI, it stressed.

The report stated that high debt levels and borrowing costs constrain policy space, particularly for many developing economies.

It showed that global trade proved resilient in 2025, growing at a faster-than-expected rate of 3.8% despite high policy uncertainty and rising tariffs.

Economic growth in the US is projected to be 2% this year and 2.2% next year, it said.

The European Union is expected to see 1.3% growth in 2026 and 1.6% in 2027.

China's economy is expected to grow 4.6% this year and 4.5% next year.

The Turkish economy is estimated to grow 3.9% in 2026 and 4.1% in 2027.