Published by Global Banking & Finance Review®
Posted on January 8, 2026
3 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe UN forecasts global economic growth to decline to 2.7% by 2026, with a slight recovery to 2.9% in 2027. Key economies like the US, China, and India show varied growth trends.
UNITED NATIONS, Jan 8 (Reuters) - Global economic growth is forecast to decline to 2.7% in 2026 from 2.8% last year before increasing to 2.9% in 2027 - still down from the pre-pandemic average of 3.2% between 2010 and 2019, according to a United Nations report released on Thursday.
The World Economic Situation and Prospects report said that while a sharp increase in U.S. tariffs in 2025 created new trade tensions, the absence of broader escalation has helped limit disruptions to international commerce.
"Despite the tariff shock, global economic activity proved resilient, supported by front-loaded shipments, inventory accumulation,and solid consumer spending amid monetary easing and broadly stable labor markets," according to the report by the U.N. Department of Economic and Social Affairs.
"Continued macroeconomic policy support is expected to cushion the impact of higher tariffs, but growth in trade and overall activity are likely to moderate in the near term," it said.
U.S. ECONOMIC GROWTH SEEN UP SLIGHTLY
The report said economic growth in the United States slowed to 1.9% in 2025 - from 2.8% in 2024 - and was forecast to edge up to 2.0% in 2026 and 2.2% in 2027, aided by expansionary fiscal and monetary policies. It said inflation would likely remain above the 2% target in 2026, "though it should gradually moderate as tariff effects wane and housing costs stabilize."
In China, the economy was projected to grow by 4.6% in 2026 and 4.5% in 2027, down from an estimated 4.9% expansion in 2025.
"A temporary easing of trade tensions with the United States - including targeted tariff reductions and a one-year trade truce - has helped stabilize confidence, while policy support is expected to sustain domestic demand," the report said.
Growth in the European Union was forecast at 1.3% in 2026 and 1.6% in 2027 - compared with 1.5% in 2025 - driven by resilient consumer spending. But higher U.S. tariffs and geopolitical uncertainty are likely to weigh on exports, the report said.
It said growth in South Asia was due to moderate to 5.6% in 2026, from 5.9% in 2025. It was forecast to return to 5.9% in 2027.
"India, growth is estimated at 7.4% for 2025 and forecast at 6.6% for 2026 and 6.7% for 2027, supported by resilient consumption and strong public investment, which should largely offset the adverse impact of higher United States tariffs," the report said.
(Reporting by Michelle NicholsEditing by Rod Nickel)
Gross Domestic Product (GDP) measures the total economic output of a country, representing the value of all goods and services produced over a specific time period.
Economic growth refers to the increase in the production of goods and services in an economy over a period of time, typically measured as the percentage increase in real GDP.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power, often measured by the Consumer Price Index (CPI).
Consumer spending is the total amount of money spent by households on goods and services, which is a key driver of economic growth.
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