The global economy will fall below its pre-pandemic growth rates due to the crisis in the Middle East

The global economy is projected to grow by only 2.5% in 2026, which is significantly lower than pre-pandemic levels. This is stated in a new UN report on economic and social issues.

The authors of the study note that the crisis in the Middle East was the main factor behind the downward revision of the forecast. Due to the conflict, the global economy has faced accelerating inflation, rising energy prices, and increased uncertainty.

Compared to the January forecast, the estimate for global economic growth has already been lowered by 0.2 percentage points. The UN believes this indicates a further weakening of the global economy.

“The crisis in the Middle East has exacerbated economic tensions in developing countries,” said Li Junhua, UN Under-Secretary-General for Economic and Social Affairs.

At the same time, the slowdown in global inflation observed since 2023 has come to a halt. In developed countries, inflation is projected to rise from 2.6% in 2025 to 2.9% in 2026. In developing economies, price growth will accelerate even more sharply—from 4.2% to 5.2%.

The UN warns that the food situation is becoming particularly dangerous. Due to problems with fertilizer supplies, producers’ costs are rising, which could lead to a new spike in food prices.

The crisis has hit the countries of West Asia the hardest. According to forecasts, the region’s economic growth rate will plummet from 3.6% in 2025 to 1.4% in 2026. This is due to problems in oil production, trade, and tourism.

The U.S. economy is expected to remain relatively stable and grow by 2%. Europe has proven more vulnerable due to its dependence on imported energy resources. Economic growth in the European Union will slow from 1.5% to 1.1%, and in the United Kingdom from 1.4% to 0.7%.

China’s economic growth will also slow—from 5% to 4.6%. India will remain one of the world’s fastest-growing major economies, though its growth rate will also decline from 7.5% to 6.4%.

The UN warns that the crisis could undo some of the gains made in development, exacerbate poverty, and worsen the situation for the most vulnerable countries. Rising energy and food prices are hitting low-income families particularly hard, as expenses are rising faster than wages.

At the same time, experts believe that the global economy may begin to gradually recover in 2027. According to the forecast, growth rates will then increase to 2.8%.