The United Nations Conference on Trade and Development (UNCTAD) has projected that the global economy will grow by 2.6 per cent in 2026, down from 2.9 per cent in 2025.
The forecast was included in UNCTAD’s Trade and Development Report 2026, presented in Geneva on October 9.
The report highlights growing differences between economies and warns that higher energy costs, trade-policy uncertainty and barriers to technological development are affecting the prospects of many developing countries.
Although global trade is expected to continue expanding, UNCTAD says the benefits of economic activity and technological progress remain unevenly distributed.
Growth slows amid economic uncertainty
The projected slowdown reflects a combination of international pressures.
Energy-market disruptions have increased costs for businesses and households, while uncertainty over trade policies has complicated investment decisions.
Higher production and transportation costs can reduce companies’ profit margins and discourage expansion.
When businesses become cautious about investing, hiring or opening new facilities, the effects can spread through the wider economy.
Governments also face pressure to maintain public services while dealing with rising borrowing costs and competing demands for limited resources.
The outlook is particularly important for countries that depend on imported energy, commodities or external financing.
Developing economies face additional challenges
UNCTAD expects developing economies collectively to grow by 4 per cent in 2026, compared with 4.7 per cent in 2025.
Although the projected rate remains higher than the global average, the slowdown suggests that developing countries are not immune to international economic pressures.
Some economies face difficulties linked to debt repayments, currency volatility and limited access to affordable credit.
Others remain dependent on a narrow range of exports, making them vulnerable to changes in global demand and commodity prices.
The report also identifies technological and policy barriers as concerns for developing economies seeking to strengthen their competitiveness.
Access to advanced technologies, digital infrastructure, finance and skilled workers can influence how effectively countries participate in international trade.
Artificial intelligence creates opportunities and risks
UNCTAD identifies artificial intelligence as an important driver of change in global trade.
AI can help businesses improve productivity, analyse markets, manage logistics and develop new products.
However, the benefits may be concentrated in countries and companies that already possess strong technological capabilities, investment resources and access to skilled workers.
Developing countries risk falling further behind if they lack the infrastructure and skills needed to adopt emerging technologies.
Policies that support digital education, affordable connectivity, innovation and technology transfer could help more countries participate in the changing global economy.
Global trade continues to expand
Despite the slower growth forecast, UNCTAD expects international trade in goods and services to increase by about 4 per cent in 2026 at constant prices.
The report also notes that global trade reached a record $35 trillion in 2025.
However, rising prices have contributed to higher trade values in 2026, meaning that increases in the monetary value of trade do not always represent equivalent increases in the volume of goods and services exchanged.
Trade patterns are also changing as businesses and governments adjust to geopolitical tensions and changing supply chains.
UNCTAD reports that trade between China and the United States has fallen by more than 20 per cent since 2024, while East Asia has expanded trade with both China and North America.
What the forecast means for Africa
African countries will need to strengthen their domestic production, diversify exports and improve infrastructure to make the most of international trade opportunities.
Investment in agriculture, manufacturing, transport, education and digital technology could help create jobs and reduce dependence on imported goods.
However, governments must also manage debt, inflation and external shocks that can undermine development gains.
UNCTAD’s forecast is a reminder that global growth alone does not guarantee improvements in living standards. The distribution of investment, access to technology and the quality of economic policies will remain important.
