The United Nations has projected that the global economy will expand by 2.7 percent in 2026, maintaining a pace slightly below 2025 levels and significantly under pre-pandemic performance averages. This outlook, detailed in the World Economic Situation and Prospects 2026 report released Wednesday, points to persistent headwinds from escalating trade conflicts, unsustainable debt burdens, and chronically weak investment.
While acknowledging that receding inflation and a shift toward accommodative monetary policies provided some support in 2025—even amidst sharp increases in U.S. tariffs—the report underscores deeper structural vulnerabilities. These include severely constrained fiscal space across nations and persistently subdued investment, which threaten to trap the world economy in an extended phase of sluggish expansion.
Global trade dynamics showed unexpected vigor in 2025, growing at 3.8 percent, fueled by anticipatory shipments and robust services exchange. However, this momentum is forecast to decelerate markedly to 2.2 percent in 2026 as the cumulative effects of protective tariffs and pervasive policy uncertainty intensify.
Regionally, Latin America and the Caribbean are anticipated to see economic growth of 2.3 percent in 2026, a marginal dip from the previous year. The UN attributes this to tempered consumer demand and only a gradual pickup in investment, with significant risks posed by elevated debt, inflexible fiscal positions, and susceptibility to external disruptions.
Inflationary pressures are receding on a global scale, with headline inflation expected to decline to 3.1 percent in 2026 from 3.4 percent in 2025. Despite this moderation, the UN emphasized that the high cost of essential goods continues to severely undermine purchasing power, particularly within developing economies where expenses for food, energy, and transport remain disproportionately high.
UN Secretary-General António Guterres highlighted the transformative impact of intersecting economic, geopolitical, and technological tensions, which are deepening uncertainty and exacerbating social strains. He noted with concern that numerous developing nations remain off course to achieve the Sustainable Development Goals.
The analysis further warned of risks associated with mounting debt obligations and potential financial market instability, including overvalued asset prices in artificial intelligence-linked sectors that may exacerbate both international and domestic inequalities.
In response, the UN issued a strong call for revitalized multilateral collaboration, urging enhanced government coordination on trade frameworks, comprehensive debt relief initiatives, and scalable climate finance. The report endorsed the Sevilla Commitment—forged at the Fourth International Conference on Financing for Development—as a vital blueprint for overhauling the international financial architecture and improving access to development and climate funding, a critical need for small and vulnerable economies such as those in the Caribbean.