Rising geopolitical tensions are testing the resilience and momentum shown by the global economy at the start of 2026, with a projected slowdown of 2.6% for this year. This is because rising energy prices, transport disruptions, market volatility, and the search for safe-haven financial assets will hinder investment and demand, warned the United Nations Conference on Trade and Development (UNCTAD) .
According to the report “Trade and Development Outlook 2026: The world economy faces a geopolitical challenge” , the United Nations agency noted that the world economy entered 2026 with resilience, supported by trade, industrial production in developing economies and investment linked to artificial intelligence (AI).
However, he warned that the global economy is moving from an initial phase of supply disruptions and inflation to a more fragile period , where prolonged uncertainty could trigger shortages and greater financial strain.
The analysis indicated that although recent years have been largely marked by trade tensions and political uncertainty, geopolitical risks are now becoming the main source of instability for the global economy.
In this context, developing economies are the most vulnerable , as they face rising fuel, food, and fertilizer prices, while also struggling with exchange rate pressures, tighter financing conditions, and lower investor confidence.
UNCTAD noted that much of the resilience observed in 2025 was due to the growing role of developing economies in trade. “Prolonged instability now threatens to undermine that momentum.”
The report noted that rising energy prices are driving up fertilizer prices and exacerbating food inflation in several developing economies.
“At the same time, volatility and tighter financing conditions are exposing the vulnerabilities of global food trading systems,” he stressed.
He warned that food security is no longer just about availability and prices. Increasingly, it is also a matter of financial stability, especially for governments already facing higher debt servicing costs.
Global merchandise trade remained relatively strong until early 2026, but much of the momentum was concentrated in AI-related products, such as semiconductors, servers, and data processing equipment . Outside of these sectors, trade growth remained much more cautious, particularly in traditional industries and commodity-related sectors.
UNCTAD predicted that global merchandise trade growth will slow from 4.7% in 2025 to between 1.5% and 2.5% in 2026 , as uncertainty and geopolitical tensions affect supply chains, shipping, and investment decisions.
Despite this environment, the organization urged ” strengthening international cooperation , achieving more predictable trade conditions, implementing greater financial safeguards for developing economies and accelerating investment in clean and affordable energy to stabilize growth and reduce vulnerability to future crises.”
The UNCTAD report comes amid tensions in the Middle East, which began on February 28.
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