The United Nations has lowered its forecast for world economic growth in 2026, due to the crisis in the Middle East that is slowing growth and reigniting inflationary pressures.
Global GDP growth is forecast at 2.5 percent for 2026, 0.2 percentage points below the January projection, while the global inflation is expected to climb 0.8 percentage points from the January forecast to 3.9 percent, according to the World Economic Situation and Prospects 2026 Mid-year Update, released Tuesday by the United Nations.
The report said that the shock of the Iran war is primarily felt in the energy sector, through constrained supply, surging prices, and rising freight and insurance costs, with effects cascading through supply chains and increasing production costs globally.
The surge in prices has added cost pressures for households and businesses worldwide, the report said.
The report also said that the war has halted the global disinflation trend underway since 2023.
"What began as a blow to energy markets on the 28th of February has turned into a broader supply shock of uncertain scope, magnitude, and duration that is rippling across the world. In the space of just 11 weeks or so, this has forced us to revise our earlier forecast for global GDP growth downwards to 2.5 percent in 2026 and 2.8 percent in 2027," said Shantanu Mukherjee, director of Economic Analysis and Policy Division under Department of Economic and Social Affairs (DESA) of the United Nations.
Western Asia is among the hardest-hit regions, with growth expected to fall from 3.6 percent in 2025 to 1.4 percent in 2026 due to energy disruption, damaged infrastructure, and setbacks in oil production, trade and tourism, the report said.
GDP growth in the European Union is projected to slow to 1.1 percent in 2026, 0.2 percentage points below the January forecast and down from 1.5 percent in 2025, as the Middle East conflict has delivered a significant terms-of-trade shock to Europe, according to the report.
Despite the bleak outlook, Mukherjee said that diversified energy mix, strategic reserves and policy support could help cushion the global economy against the shock. He urged greater international cooperation in areas such as renewable energy, efficiency, and economic diversification.
"Though prospects are somber, there are concrete areas where international cooperation makes a difference: countries face a renewed impetus for establishing resilience, whether these be through investing in renewable energy and energy efficiency, diversifying their economies, making targeted sectoral interventions are improving mobilization and use of resources. All of these are shared priorities that the international system and the UN can help support," said Mukherjee.
UN lowers 2026 global growth forecast to 2.5 pct, citing Mideast conflict
The United Nations Security Council on Wednesday called on all parties to conflict to comply with their obligations under international law to protect civilians.
The call came as the Security Council held its annual day-long open debate on the protection of civilians in armed conflict. At the debate, the Security Council was briefed that while civilians continue to suffer because parties to the conflict choose to ignore their legal obligation to protect them, adhering to the rules of war and enforcing accountability when they are broken can produce a different result.
Edem Wosornu, director of the Crisis Response Division in the Office for the Coordination of Humanitarian Affairs, said one civilian was killed approximately every 14 minutes in 2025.
"Protecting civilians in armed conflict is not charity. It is the minimum that humanity and civilian civilization require. It is central to peace and security. It is the responsibility of this Council and of every Member State that signed the United Nations Charter, and it is what many people around the world expect the Member States of the United Nations to do. It cannot be outsourced. It cannot be postponed. It cannot be diluted. It is the choice we have to make now," said Wosornu.
The United Nations recorded over 37,000 civilian deaths across 20 armed conflicts last year, compared to the 36,000 civilian deaths recorded across 14 armed conflicts in 2024.
Addressing the debate, Mirjana Spoljaric, president of the International Committee of the Red Cross, said "Wars fought without rules transform wars between combatants into wars against civilians. In recent weeks, I have undertaken several missions to the Middle East, where the impact of conflict on civilians is painfully clear. But brutal patterns of warfare are becoming pervasive across regions from the Middle East to the Horn of Africa, to eastern Europe, and beyond. We can no longer pretend that what we are witnessing across war zones is in accordance with the law."
Fu Cong, China's permanent representative to the United Nations, said at the debate that civilians are the biggest victims of armed conflict, underlining the need to promote the political settlement of hotspot issues and eliminate the threat of violence to security.
It is an obligation that all parties must fulfill in accordance with international humanitarian law, he said, adding that any double standards or selective application are unacceptable.
"The world today is rife with turmoil and escalating conflicts, claiming countless innocent lives and tearing families apart. The secretary-general's report indicates that more than 20 conflicts worldwide this year have resulted in at least 37,000 civilian deaths and displaced over 100 million people. This harsh reality once again warns us that we must act with greater urgency and stronger measures to protect civilians," said Fu.
UN Security Council calls on all parties to conflict to protect civilians
