tradewars

The global economy is losing momentum, and according to the latest UN report released Thursday, the year 2026 could bring significant economic challenges. The culprits: Trump’s trade barriers, ongoing geopolitical tensions, and mounting uncertainty across regions.
The United Nations forecasts that global GDP growth will slow to 2.7% in 2026, down from a projected 2.8% in 2025. While growth may rebound slightly to 2.9% in 2027, it remains well below the pre-pandemic average of 3.2%.

Tariffs begin to take full effect
While countries managed to absorb the U.S. tariffs introduced by Trump in April 2025, the UN warns that their full impact will become much more visible in 2026.
Global trade growth is expected to decline from 3.8% to just 2.2%.
“The combination of economic, geopolitical, and technological tensions is reshaping the global landscape and creating new economic uncertainty and social vulnerability,” said UN Secretary-General António Guterres.

U.S. defies the trend, while Europe and Asia slow down
While most of the world braces for slower growth, the United States is moving against the tide. Thanks to expansive fiscal and monetary policies, U.S. growth is expected to rise to 2% in 2026 (up from 1.9% in 2025).
Highlights by region:
🔹 European Union: growth expected to slow to 1.3%

🔹 Japan: forecasted at 0.9%

🔹 China: expected to slow to 4.6% (from 4.9%) – despite that, its trade surplus in the first 11 months of 2025 exceeded $1 trillion, reflecting strong export performance to non-U.S. markets

Mixed outlook for developing regions
📍 Africa – slight increase from 3.9% to 4.0%

📍 South Asia – slowdown from 5.9% to 5.6%

📍 East Asia – drop from 4.9% to 4.4%

📍 India – expected to grow 6.6% in 2026, down from 7.4% in 2025

📍 Latin America and the Caribbean – moderate decline from 2.4% to 2.3%, facing new U.S. tariffs, changes in immigration policy, and rising shipping costs

Poorest countries still far from sustainability goals
For the world’s least developed countries, the forecast shows:
🔹 2025 – 3.9% growth

🔹 2026 – 4.6% growth

🔹 2027 – 5.0% growth
While this marks some improvement, it still falls short of the 7% growth target needed to meet the UN’s Sustainable Development Goals (SDGs).

Inflation cools, but hidden risks remain
The report offers some positive signs—namely, slowing global inflation:
Global inflation is expected to ease to 3.1% in 2026, down from 3.4% in 2025. Key factors include:
🔹 Declining energy and food prices

🔹 More stable currencies

🔹 Slower wage growth
The labor market remained relatively steady in 2025, with global unemployment at 5%, expected to dip slightly to 4.9% in 2026. However, youth unemployment remains a serious concern, with more than 257 million young people globally neither working nor attending school.

UN: Governments have limited room to act
The UN also warns that governments have less and less room to maneuver. High debt levels, tight budgets, and declining foreign aid are undermining essential services in the world’s poorest nations.
Despite early concerns about job losses from rising tariffs, partial rollbacks of trade restrictions in late 2025 helped soften some of the negative impacts – but serious risks remain.

#globaleconomy , #TradeWars , #Geopolitics , #TRUMP , #TrumpTariffs

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