UNCTAD Sees World Growth Slowing to 2.6 Percent in 2026 as Asia Supplies 59 Percent of Growth
UNCTAD expects world output growth to slow to 2.6 percent in 2026 from 2.9 percent in 2025, before edging up to 2.7 percent in 2027, according to its Trade and Development Report 2026 published on 9 October. The report also puts world trade at a record 35 trillion dollars in 2025 and expects Asia to account for 59 percent of global growth in 2026.
Three forecasters, one direction, different starting points
The agency and the World Bank, in its June Global Economic Prospects, agree on the starting point. Both put 2025 growth at 2.9 percent. From that shared base the agency is 0.1 percentage point less pessimistic for 2026 and 0.1 point more cautious for 2027, at 2.7 percent against the bank’s 2.8 percent.
The IMF’s numbers are higher at every horizon and start from a higher 2025 base: 3.5 percent for 2025, 3.0 percent for 2026 and 3.4 percent for 2027 in its July update, after 3.1 percent and 3.2 percent for 2026 and 2027 in April. Measured as the step down from 2025 to 2026, the three tell a similar story, on our calculation: 0.3 point in the new report, 0.4 point for the bank and 0.5 point for the Fund.
World growth projections, percent
| Forecaster | 2025 | 2026 | 2027 |
|---|---|---|---|
| UNCTAD, October 2026 | 2.9 | 2.6 | 2.7 |
| World Bank, June 2026 | 2.9 | 2.5 | 2.8 |
| IMF, July 2026 | 3.5 | 3.0 | 3.4 |
2025 is an estimate in the agency’s table. Differences and step-downs given in the text are our calculation.
The bank’s June report also set out a downside case in which global growth could fall to 1.3 percent in 2026.
Developing economies slow, and Asia carries the load
Growth in developing economies is projected to ease from 4.7 percent in 2025 to 4.0 percent in 2026, then recover to 4.4 percent in 2027. Developed economies move far less, from 1.7 percent to 1.6 percent in both projection years. The growth gap between the two groups therefore narrows from 3.0 points to 2.4 points this year before widening to 2.8 points in 2027, on our calculation.
Within Asia, India is projected to grow 7.3 percent, 2.8 times the world rate on our calculation, with Indonesia at 5.2 percent and China at 4.5 percent, down from 5.0 percent. The report finds that most developing economies have fallen further behind since the mid-2010s.
Saudi Arabia is projected to grow 4.5 percent in 2027, 1.7 times the projected world rate for that year on our calculation, and the report says the kingdom is advancing diversification under its Vision 2030, with non-oil growth partly offsetting lower oil revenues and production cuts. The Fund’s July update is more positive on the near term, at 1.7 percent for 2026 and 5.5 percent for 2027. For 2026 itself, the report’s table carries a 1.0 percent contraction for Saudi Arabia, within a Western Asia figure of minus 0.9 percent, after 4.6 percent and 3.9 percent respectively in 2025.
Output growth by economy and group, percent
| Economy or group | 2025 | 2026 | 2027 |
|---|---|---|---|
| World | 2.9 | 2.6 | 2.7 |
| Developed economies | 1.7 | 1.6 | 1.6 |
| Developing economies | 4.7 | 4.0 | 4.4 |
| United States | 2.1 | 2.1 | 1.8 |
| Euro area | 1.4 | 1.0 | 1.2 |
| China | 5.0 | 4.5 | 4.5 |
| India | 7.3 | 7.3 | 6.8 |
| Indonesia | 5.1 | 5.2 | 5.0 |
| Africa | 4.4 | 4.1 | 4.2 |
| Western Asia | 3.9 | -0.9 | 4.5 |
| Saudi Arabia | 4.6 | -1.0 | 4.5 |
From Table I.1 of the Trade and Development Report 2026; 2025 is an estimate, 2026 and 2027 are projections. Group aggregates are based on GDP in constant 2020 dollars at market exchange rates.
Trade outpaces output, on a narrow base
Trade in goods and services grew 4.4 percent in real terms in 2025, 1.5 points faster than world output on our calculation, and the agency expects trade growth in 2026 to come in well above what was anticipated when the conflict in the Middle East began. Prices are doing part of the work: since March 2026, higher prices have driven much of the registered growth in trade values, and the report notes that Brent crude climbed from 70 dollars to more than 110 dollars a barrel in the weeks after the conflict began, a rise of more than 57 percent on our calculation.
The base is narrow. AI-related goods accounted for 42 percent of the growth in global goods trade in 2025. Barriers are rising at the same time: the global average duty on manufactured goods more than doubled from 1.9 percent in 2024 to 4.7 percent in 2025, to 2.5 times its 2024 level on our calculation. Trade between China and the United States has fallen by more than 20 percent since 2024, while East Asia has expanded trade with both China and North America. Outside Asia, the value of trade among developing economies grew 2.5 percent in 2025, against 8 percent a year from 2019 to 2024.
Aid is shrinking as volatility rises. Official development assistance is projected to fall 6.9 percent in 2026, a third straight annual decline, and volatility in non-resident portfolio flows doubled in 2026 compared with its 2014 to 2025 average. The report puts the financing gap for the Sustainable Development Goals at 4.3 trillion dollars. Pedro Manuel Moreno, the agency’s Acting Secretary-General, said rising economies of the Global South “are becoming regional anchors, extending trade integration to new financial initiatives.”
Why it matters: For the world economy, the three forecasters’ figures imply a step down in growth from 2025 to 2026 of between 0.3 and 0.5 points on our calculation, and the report’s own figures show it falling unevenly: developing economies lose 0.7 points of growth in 2026 and developed economies 0.1. On our reading, trade growth rests on a narrow base, with AI-related goods supplying 42 percent of the growth in goods trade in 2025 while the average duty on manufactured goods more than doubled.
Outlook: All three forecasters see some recovery in 2027, to 2.7 percent in the report, 2.8 percent for the bank and 3.4 percent for the Fund. The next test of those numbers comes on 13 October, when the Fund publishes its October World Economic Outlook at the Annual Meetings in Bangkok.
Sources: UNCTAD, World Bank, IMF, The Edge.
