The report noted that a sharp increase in US tariffs “created new trade frictions, although the absence of a broader escalation helped limit immediate disruptions to international trade.”
Risks remain high
Unexpected resilience to the tariff shock, supported by strong consumer spending and lower inflation, helped sustain growth, but underlying weaknesses remain.
Weak investment and limited fiscal space are weighing on economic activity, meaning the global economy could adopt a persistently slower growth path than in the pre-pandemic era.
A partial easing of trade tensions has helped limit international trade disruptions, but the impact of higher tariffs, coupled with elevated macroeconomic uncertainties, is expected to become more evident this year.
The report notes that financial conditions have eased amid monetary easing and improving consumer confidence, but risks remain high given elevated asset valuations, especially in sectors linked to rapid advances in artificial intelligence (AI).
Uncertainty and vulnerabilities
Meanwhile, high debt levels and borrowing costs are limiting policy space, particularly for many developing economies.
“A combination of economic, geopolitical and technological tensions is reshaping the global landscapegenerating new economic uncertainty and social vulnerabilities,” said UN Secretary General António Guterres.
He warned, however, that “many developing economies continue to struggle”, which is putting at risk progress towards achieving the Sustainable Development Goals (SDGs).
A trader walks through a market in the Central African Republic.
Uneven regional outlook
The report concludes that the economy growth in the united states It is projected to be 2.0 percent in 2026 (compared to 1.9 percent in 2025), supported by monetary and fiscal easing, although a weakening labor market is likely to influence the momentum.
In it European UnionEconomic growth is forecast at 1.3 percent, down from 1.5 percent in 2025, as higher U.S. tariffs and ongoing geopolitical uncertainty curb exports.
Meanwhile, in East AsiaGrowth is projected at 4.4 percent, up from 4.9 percent a year earlier, as early export momentum fades. The region’s largest economy, China, is expected to grow 4.6 percent (slightly less than in 2025) supported by targeted policy measures.
Growth in South Asia It is forecast to be 5.6 percent in 2026, up from 5.9 percent in 2025. This is being led by India’s 6.6 percent expansion which experts say is driven by resilient consumption and substantial public investment.
In AfricaOutput is forecast to grow 4.0 percent, a slight rebound from 3.9 percent in 2025, but high debt and climate-related crises pose significant risks.
In Latin America and the CaribbeanOutput is expected to rise 2.3 percent this year, down slightly from 2.4 percent in 2025, amid moderate growth in consumer demand and a slight recovery in investment.
International trade slows down
The report found that Global trade proved resilient in 2025.expanding at a faster-than-expected rate of 3.8 percent despite elevated political uncertainty and rising tariffs.
This expansion was driven by anticipated shipments earlier in the year and strong growth in services trade; However, momentum is expected to weaken and trade growth is expected to slow to 2.2 percent.
At the same time, investment growth has remained subdued in most regions due to geopolitical tensions and tight fiscal conditions.
The report noted that monetary easing and targeted fiscal measures have supported investment in some economies, while rapid advances in AI fueled pockets of strong capital spending in a few large markets.
However, any potential benefits from AI are likely to be unequally distributed, potentially widening existing structural inequalities.
Rising prices reduce purchasing power
The report also highlighted that high prices remain a key global challenge even as disinflation continues.
Holder inflation – that is, the general increase of all goods and services in an economy – decreased from 4.0 percent in 2024 to an estimated 3.4 percent in 2025 and is expected to slow further to 3.1 percent this year.
“Even as inflation recedes, high and still rising prices continue to erode the purchasing power of the most vulnerable,” said Junhua Li, UN Under-Secretary-General for Economic and Social Affairs.
“To ensure that lower inflation translates into real improvements for households, it is necessary to safeguard essential spending, strengthen competition in the market and address the structural factors of recurring price shocks.”
Global action now
The report calls Deeper global coordination and decisive collective action. amid the current era of trade realignments, persistent price pressures and climate-related shocks.
It highlights that many poorer nations, landlocked countries and small island developing states “remain particularly constrained by debt burdens, limited policy space and exposure to external shocks”, thus underlining the need to Greater international support to promote resilient and sustainable growth..
The authors point to the Seville Commitment, the final document of the Fourth International Conference on Financing for Development held in Spain last year, as a plan to strengthen multilateral cooperation, reform the international financial architecture and expand financing for development.