UNITED NATIONS (AP) — Responding to Middle East crises and rising oil prices, the United Nations on Tuesday lowered its forecast for global economic growth and raised the prospects for inflation this year.
U.N. economists said global GDP growth is now forecast at 2.5% for 2026, down from 2.7% in January, and they said it could fall to only 2.1% “in a more adverse scenario.”
That would be one of the weakest growth rates this century, outside of the COVID-19 pandemic and the global financial crisis of 2008, Shantanu Mukherjee, director of economic analysis in the U.N. Department of Economic and Social Affairs, said at a news conference.
On a somewhat positive note, he said, “we are not close” to a recession, but life can get harder for billions of people, and some countries may see their economies contract.
Global inflation is projected to rise to 3.9% this year, 0.8% higher than forecast in January, before the U.S. and Israel launched airstrikes on Iran. Iran responded by blocking the Strait of Hormuz, a critical waterway for shipments of oil, natural gas, fertilizer and other petroleum products.
“ Increased energy prices are a potent factor, as are the prices of refinery products that are crucial to industrial production and commercial transport,” Mukherjee said.
But he stressed that not all countries will experience the same rate of inflation.
In richer developed countries, inflation is projected to rise from 2.6% in 2025 to 2.9% in 2026. In developing countries, inflation is forecast to accelerate from 4.2% to 5.2% as higher costs for energy, transportation and imported goods erode real incomes.
The impact of the Iran war has been highly uneven, with the most severe economic damage concentrated in West Asia, a region comprised of 21 Arab countries, including those in the Persian Gulf, according to the World Economic Situation and Prospects report for mid-2026.
Economic growth in the region is projected to plunge from 3.6% in 2025 to 1.4% in 2026, “driven not only by the energy shock but also by direct infrastructure damage and severe disruptions to oil production, trade and tourism.”
In Africa, average growth is projected to drop only slightly, from 4.2% last year to 3.9% this year, according to the report. And in Latin America and the Caribbean, it is forecast to slow from 2.5% to 2.3% in 2026.
In the United States, the economy is expected to remain “comparatively resilient” with 2% growth forecast this year, broadly similar to 2025, it said.
By contract, Europe “is more exposed, with heavy reliance on imported energy straining households and businesses,” the economists said. Economic growth in the European Union is expected to slow from 1.5% in 2025 to 1.1% in 2026, while growth in the United Kingdom is forecast to drop further, from 1.4% last year to 0.7% this year.
In Asia, the U.N. said China’s diversified energy mix, sizable strategic reserves and government actions are providing a buffer, so its economic growth is only expected to slow from 5% in 2025 to 4.6% this year.
India is forecast to remain one of the fastest growing major economics, with its economy expanding by 6.4% this year, although that is lower than its 7.5% growth in 2025.
“The question for China, similar to the case of India and other countries, is just how long with this conflict and the impact of the conflict last, because all these different buffers are clearly limited,” senior U.N. economist Ingo Pitterle told reporters.
The South Korean-operated vessel HMM NAMU is docked after being damaged from a fire following an explosion in the Strait of Hormuz, at a port in Dubai, United Arab Emirates, Friday, May 8, 2026. (Kim Sang-hun/Yonhap via AP)
President Donald Trump and Israeli Prime Minister Benjamin Netanyahu spoke Thursday about Turkey as well as U.S. moves in the Persian Gulf, according to the prime minister’s office. Turkey and Israel have acrimonious relations. Netanyahu has urged Trump not to sell jets to Turkey, saying it would put Israel in danger.
The U.S. launched new airstrikes against Iran hours after Trump said recent Iranian attacks on ships in the Strait of Hormuz signaled the end of the ceasefire and threatened to escalate the conflict if they didn’t stop. Iran responded by targeting U.S.-allied Kuwait and Qatar and accused the U.S. of striking near its sole nuclear power plant.
Back-and-forth attacks have repeatedly threatened the ceasefire, but Thursday’s appeared bigger all around. And Trump’s mixed messaging — approving back-to-back military strikes while insisting they don’t mean a return to full-scale war — is fueling uncertainty about what comes next.
Whether it’s a negotiation tactic or a signal of further escalation, mediators are scrambling to save the interim deal. The inflamed tensions could also spell trouble for Republicans in November’s midterm elections if gas prices stay high.
Here's the latest:
The funeral for Iran’s supreme leader, Ayatollah Ali Khamenei, was designed to showcase unity in a country that is bitterly split over his decades-long rule. Supporters thronged the streets for a leader they view as a martyr who defied the West and Israel.
But Khamenei’s long rule left large sectors of Iranian society disillusioned as he oversaw increasingly bloody crackdowns, economic stagnation and the empowerment of the Revolutionary Guard. Anger and despair run deep after a January crackdown killed thousands.
The war launched by the United States and Israel brought more suffering while leaving the government intact, deepening the feeling of hopelessness among its opponents.
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A deal between Lebanon and Israel was billed as paving the way for peace. But in Lebanon, it is deepening longtime divisions and raising fears of political paralysis or even a return to civil war.
The U.S.-brokered deal envisions an Israeli troop withdrawal from Lebanon and an eventual peace agreement between the two countries — which technically remain in a state of war nearly 80 years after Israel’s establishment. But the agreement says a full Israeli withdrawal will happen only after Hezbollah is disarmed, infuriating the Iran-backed militant group.
The tensions have stirred up memories of Lebanon’s devastating 1975-1990 civil war and reminded many of more recent clashes between Hezbollah gunmen and pro-government fighters in 2008. They also have raised deep questions over whether the U.S.-brokered deal will be able to get off the ground.
A resumption of the war between the U.S. and Iran would further complicate the deal’s prospects and raise the risk of renewed conflict between Israel and Hezbollah.
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Stocks rose, and oil prices eased Thursday as financial markets calmed in the wait to see what will come next after President Donald Trump raised doubts about the temporary truce in the war with Iran.
The S&P 500 climbed 0.8% and more than recovered its loss from the day before, even though the United States launched new airstrikes against Iran, which responded by targeting U.S. allies in the Middle East. The Dow Jones Industrial Average added 139 points, or 0.3%, and the Nasdaq composite rallied 1.3%.
In the oil market, prices gave back much of their jumps from the day before. The price for a barrel of Brent crude, the international standard, fell 2.2% to $76.30. That’s down from $78.02 the day before though still above its $71.80 price from the end of last week.
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The Israeli prime minister’s office posted on the social platform X that the pair spoke on Thursday and that Netanyahu “raised the severity of the statements made by Turkish President Recep Tayyip Erdogan and his people against the existence of the State of Israel.”
After this week’s NATO summit in Turkey, Trump indicated he may be ready to have the U.S. sell F-35 fighter jets to Erdogan’s country -- but he also says he’s not yet fully made up his mind.
Turkey and Israel have acrimonious relations. Netanyahu has urged Trump not to sell the jets to Turkey, saying it would put Israel in danger.
The statement from Netanyahu’s office also said Trump had updated the prime minister on American moves in the Persian Gulf.
A South Florida airport has officially changed its name to the President Donald J. Trump International Airport.
Signs for the Palm Beach International Airport have been removed, while new signs were unveiled Thursday.
“Trump Force One,” a Boeing 757 owned by The Trump Organization, was the first plane to arrive at the airport under its new name, shortly after 5 a.m. The president’s son, Eric Trump, was one of the passengers.
The Trump family regularly uses the West Palm Beach airport when they visit Trump’s Mar-a-Lago home in nearby Palm Beach. A stretch of road from the airport to Trump’s estate was renamed Donald J. Trump Boulevard earlier this year.
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After weeks of stagnation, an American official said Thursday that the U.S.-brokered framework agreement soon will shift to technical discussions in Rome.
The official, who spoke on the condition of anonymity to discuss sensitive diplomatic details, said “pilot zones” that both sides had agreed to will launch in the coming days while additional zones are mapped out and planned.
The zones will be where the Israeli military is to turn over control to the Lebanese army after clearing the areas of any Hezbollah presence. U.S. Central Command is coordinating with Israel and Lebanon on the zones, the official said.
The dates of the meetings and the location of the zones were not yet clear. A State Department spokesperson said they were not previewing those details yet.
— Farnoush Amiri
Abbas Araghchi said on his Telegram channel on Thursday that he spoke with the foreign ministers of Saudi Arabia, Turkey and Oman. He also spoke with Pakistan’s army chief, Field Marshal Asim Munir, who has been one of the main mediators in the war.
Araghchi repeated Iran’s assertion that the U.S. has violated the interim peace deal reached last month. The U.S. says Iran violated the deal by firing on commercial ships in the Strait of Hormuz.
The diplomatic outreach suggested efforts may be underway to reduce tensions.
Crews have draped tarps over the towering stone columns on the north side of the White House, where work is underway to scrape away decades of paint.
The new tarps on the building’s façade are partially see-through. They feature images of columns designed to cover the actual ornate stone columns beneath.
Scaffolding went up several days ago for work on the columns. It is the latest in dozens of projects Trump has led to remake the White House to his own tastes – including a massive ballroom and helipad on the South Lawn.
The White House hasn’t provided details on what is being done to the columns or how much it will cost. But Trump said on Monday: “We’ve taken about 150 years of paint off of the columns” and added that, “If you don’t strip the paint off, it gets worse and worse and worse.”
Bridget Diakun, senior risk and compliance analyst for maritime data company Lloyd’s List Intelligence, said in a news briefing that ships were still passing through the strait as of Wednesday, but Lloyd’s is still reviewing the numbers since some passages are “dark,” when ships stop broadcasting signals that show their location.
“The situation does remain really volatile,” she said.
Lloyd’s List Intelligence said preliminary data shows there were at least 576 transits in June, up from 233 in May, but down from 3,131 in June 2025.
Non-Iranian traffic in June included 264 outbound vessels and 137 inbound ships.
Outbound ships included bulkers, crude oil tankers and product tankers. Inbound ships included crude oil tankers, product tankers, bulk carriers and gas carriers.
In June, there was an even split between “dark” transits and online transits that broadcast their locations.
German Chancellor Friedrich Merz said the agreement on the long-range cruise missiles, which are used to strike targets deep inside enemy territory, was reached this week on the sidelines of the NATO summit in Turkey’s capital, Ankara.
“This will close an important strategic gap in our defense, and at the same time, we will work to develop our own European systems and station them in Europe,” Merz told parliament after returning from the two-day summit.
The deal struck with the Trump administration amounts to broader export of American know-how to some of its major allies in Europe, whose security posture has been upended by Russia’s full-scale invasion of Ukraine.
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The former Olympic canoe racer pleaded not guilty Thursday to deliberately damaging the recently renovated Lincoln Memorial Reflecting Pool, a politically charged case that his defense attorneys and other Trump administration critics have derided as an abuse of prosecutorial power.
David Hearn, who competed in three Summer Olympics, entered the plea during his initial appearance in D.C. Superior Court. Hearn, 67, of Bethesda, Maryland, was indicted last Thursday on a single felony count of property destruction.
Trump ordered a multimillion-dollar renovation of the Reflecting Pool ahead of the nation’s 250th anniversary this month, but the project has been plagued with problems. Workers have used chemicals to curtail an algae bloom. Trump has said the pool likely would need to be drained again for liner repairs after chunks of blue coating were seen floating at the surface.
Trump has claimed without substantiation that vandals dumped fertilizer into the pool and slashed the coating with a box cutter.
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During Wednesday’s meeting with Ukrainian President Volodymyr Zelenskyy on the sidelines of the NATO summit in Turkey, Trump said the U.S. will meet a longstanding request from Ukraine and give it a license to make the Patriot air defense systems. He also praised Zelenskyy for doing “an amazing job” — a sharp change in tone from past criticisms of the Ukrainian leader.
But setting up domestic production of the mobile, surface-to-air systems will take many months, said Serhii Beskrestnov, an adviser to Ukraine’s defense minister.
A production license would typically come with technical process documentation, training for specialists, supplier contacts and foreign consultants to help launch manufacturing, Beskrestnov wrote on the Telegram messaging app.
The main obstacle would be time, rather than Ukraine’s technical or organizational capacity, he added.
The southern African kingdom of Eswatini has accepted a fourth group of people deported from the United States under a bilateral agreement to host third-country nationals, with 11 people arriving this week, the government said Thursday.
Acting government spokesperson Thabile Mdluli said the group, predominantly from African countries, would remain in the kingdom temporarily while their rights were protected.
“The government reaffirms that, during their temporary stay in the Kingdom, the fundamental rights of the third-country nationals will be respected and protected in accordance with the laws of the Kingdom of Eswatini and the Kingdom’s international obligations,” Mdluli said in a statement.
Under a series of often-secret agreements that are part of a broad U.S. crackdown on immigration, the Trump administration has deported thousands of people to nearly two dozen countries that are not their own, advocates say.
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Futures for the S&P 500 rose 0.1% before the opening bell Thursday, while futures for the Dow Jones Industrial Average fell 0.1%. Nasdaq futures were up 0.5%.
Oil prices inched up again Thursday, with Brent crude, the international standard, rising 64 cents to to $78.66 per barrel. It briefly topped $80 on Wednesday. Before the Iran war began, Brent oil was trading at around $72 a barrel. Earlier optimism over an interim peace deal recently brought it back to prewar levels.
Benchmark U.S. crude rose 54 cents to $74.06 a barrel.
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President Donald Trump says he believes the ceasefire with Iran is over. He says he’s not sure he wants a deal anymore and says the U.S. should “finish the job.” But he also insists continued attacks don’t mean a return to war or long-term action.
The confusion and uncertainty in Trump’s mixed messaging and his approval of back-to-back military strikes leave major questions about what comes next in the conflict, just weeks after difficult diplomacy to reach even an initial deal between the longtime adversaries.
The whipsawing rhetoric could be a strategy to increase the pressure on Tehran to stop attacking ships transporting oil and natural gas in the Strait of Hormuz and bend to U.S. demands on its nuclear program — something Trump has tried before.
Whether it’s a negotiation tactic or a signal of an escalation in fighting, mediators are scrambling to save the interim deal and the actions risk further inflaming tensions.
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President Donald Trump speaks with reporters in flight on Air Force One after landing at U.S. Air Force Base at RAF Mildenhall, in Suffolk, Eastern England, Wednesday, July 8, 2026. (AP Photo/Alex Brandon)
President Donald Trump waves as he arrives on Air Force One, Thursday, July 9, 2026, at Joint Base Andrews, Md. (AP Photo/Alex Brandon)
President Donald Trump arrives on Air Force One, Thursday, July 9, 2026, at Joint Base Andrews, Md. (AP Photo/Alex Brandon)
