Global economic growth is projected to slow to 2.6% in 2026 from 2.9% in 2025, while developing economies are expected to grow by 4%, down from 4.7%, according to UNCTAD’s Trade and Development Report 2026: The Geoeconomics of Development, released in Geneva on October 9.
Despite slower growth, global trade in goods and services is forecast to expand by around 4% in 2026. However, rising energy costs, financial instability and growing technology and trade barriers are creating additional challenges for developing economies.
Asia is expected to contribute 59% of global economic growth in 2026, led by India’s projected 7.3% growth, followed by Indonesia at 5.2% and China at 4.5%. The report highlights the region’s resilience but warns that opportunities for other developing economies to catch up with advanced countries are narrowing.
Artificial intelligence is emerging as a major driver of global merchandise trade, but its economic benefits remain concentrated. The report also notes that developed economies capture around 70% of announced greenfield investment in high-value strategic sectors, including semiconductors, clean-energy technologies and AI infrastructure.
UNCTAD recommends that developing countries diversify trade and energy sources, strengthen regional cooperation, coordinate industrial and technology policies, and link foreign investment to domestic suppliers to increase local value addition.
Pedro Manuel Moreno, acting Secretary-General of UNCTAD, emphasized that rising economies of the Global South are becoming important anchors for regional trade integration and financial cooperation.
