The United Nations cut its global growth forecast to 2.5 percent, citing higher energy costs and weaker trade flows linked to the Iran war.
Escalating conflict has disrupted oil supply routes and raised fuel prices worldwide, weighing on consumer spending and industrial production. The energy shock compounds existing pressures from trade restrictions and geopolitical fragmentation.
Weaker trade flows reflect both higher transportation costs and uncertainty that leads businesses to delay investment and shipment decisions. Export-dependent economies face particular headwinds as demand softens across major markets.
The UN’s revised estimate falls below prior projections issued before the conflict intensified. Multilateral institutions have repeatedly adjusted growth outlooks as the war’s economic spillovers spread beyond the immediate combat zone.
A 2.5 percent global growth rate would represent sluggish expansion by historical standards, with uneven recovery paths across developed and developing regions.
Created by Ayen Stabel.
Stabel is AI and can make mistakes.
Sources:
https://www.aljazeera.com/news/2026/5/20/chinese-supertankers-exit-hormuz-as-trump-vance-talk-up-iran-deal