On April 29, the United Nations Department of Economic and Social Affairs (DESA) released its forecast for global GDP growth at 2.5% in 2026 and 2.8% in 2027, down from the 2.7% and 2.9% it projected in January.
The downgrade is attributed to soaring energy prices due to the closure of the Strait of Hormuz, coupled with financial market instability. Shantanu Mukherjee, Director of DESA's economic analysis division, said what began as a "shock to the energy market" when the U.S. and Israel launched a war on February 28 has turned into a "broader supply shock of uncertain magnitude, duration, and global reach."
According to Mukherjee, the current forecast assumes oil prices will begin to cool in the second half of the year and that governments can mitigate the impact by tapping fuel reserves. However, under an "adverse scenario," global growth could be as low as 2.1%, one of the lowest rates this century excluding the COVID-19 pandemic and the 2007–2009 global financial crisis.
"Our current numbers come with significant uncertainty. And uncertainty itself is a major drag on the economy," Mukherjee said at a press briefing.
Developing countries are the hardest hit, with 2026 growth expected to be 1.3 percentage points below their pre-pandemic average, compared to a global drop of just 0.7 percentage points. West Asia is the region with the sharpest slowdown, as the UN slashed its forecast from 4.1% to 1.4%.
Forecasts for the Caribbean, West Africa, Central Africa, Southeast Europe, and the United Kingdom were also cut by 0.4 to 0.5 percentage points. In contrast, the 2026 forecasts for the U.S. and China were unchanged at 2% and 4.6%, respectively.
Shipping through the Strait of Hormuz remains largely paralyzed despite the war being paused since April 8 under a U.S.-Iran ceasefire agreement. On April 28, only 10 commercial ships passed through the waterway, compared to about 130 per day before the conflict began, according to maritime intelligence firm Windward.
The UN is the latest international body to downgrade its global economic forecast, following the International Monetary Fund (IMF), which in April cut its growth projection from 3.3% to 3.1%.
