UN Forecasts Sluggish Global Growth Through 2027

A new United Nations report projects the global economy will continue to experience sluggish growth, failing to recapture its pre-pandemic momentum. The forecast sees global economic growth declining to 2.7% in 2026 before ticking up to 2.9% in 2027.

This outlook, detailed in the UN's "World Economic Situation and Prospects" report, remains significantly below the 3.2% average growth rate the world enjoyed between 2010 and 2019.

US Tariffs Create Headwinds, But Resilience Prevails

The report identifies new trade tensions, sparked by a sharp increase in U.S. tariffs in 2025, as a key factor shaping the forecast. However, the absence of a wider trade war has so far limited major disruptions to international commerce.

According to the UN Department of Economic and Social Affairs, global economic activity has proven resilient despite the tariff shock. This stability was supported by several factors:

• Front-loaded shipments and inventory accumulation

• Solid consumer spending

• Monetary easing measures

• Broadly stable labor markets

While continued macroeconomic policy support is expected to soften the blow from higher tariffs, the report cautions that growth in both trade and overall economic activity will likely moderate in the near term.

A Mixed Outlook for Major Economies

The global forecast masks divergent paths for the world's largest economic blocs, from a slowdown in the United States and China to more modest growth in Europe and robust expansion in India.

United States: Slowdown Followed by Modest Rebound

Economic growth in the United States is projected to slow from 2.8% in 2024 to 1.9% in 2025. The UN forecasts a slight recovery to 2.0% in 2026 and 2.2% in 2027, aided by expansionary fiscal and monetary policies. Inflation is expected to remain above the 2% target in 2026 but should gradually cool as tariff effects fade and housing costs stabilize.

China: Growth Decelerates Despite Policy Support

China’s economy is projected to grow by 4.6% in 2026 and 4.5% in 2027, marking a slowdown from the estimated 4.9% expansion in 2025. A temporary easing of trade tensions with the U.S., including targeted tariff cuts and a one-year trade truce, has helped stabilize business confidence. Meanwhile, policy support is expected to sustain domestic demand.

European Union: Consumers Face Export Headwinds

Growth in the European Union is forecast at 1.3% in 2026 and 1.6% in 2027, a slight adjustment from 1.5% in 2025. This growth is primarily driven by resilient consumer spending. However, the report warns that higher U.S. tariffs and ongoing geopolitical uncertainty are likely to weigh on the bloc's export performance.

South Asia: India Remains a Bright Spot

Growth across South Asia is expected to moderate to 5.6% in 2026 from 5.9% in 2025, before returning to 5.9% in 2027.

India stands out with a strong forecast. After an estimated 7.4% growth in 2025, the economy is projected to expand by 6.6% in 2026 and 6.7% in 2027. The report credits this performance to resilient consumption and strong public investment, which are expected to largely offset the adverse impact of higher U.S. tariffs.