Global goods trade growth may slow to 1.5%-2.5% in 2026 due to uncertainty

The UN Conference on Trade and Development (UNCTAD) has projected a sharp slowdown in global goods trade growth, from 4.7% in 2025 to 1.5%-2.5% in 2026, citing rising uncertainty and weakening global demand.The UN body cautioned that the continued closure of the Strait of Hormuz in West Asia, along with damage to energy infrastructure, could heighten inflationary pressures in regions such as Europe and South Asia, which are heavily dependent on energy imports from the region.In its second rapid assessment, UNCTAD said, “Trade started 2026 on a strong footing but is expected to lose momentum as the year progresses,” noting that “rising geopolitical tensions are increasing uncertainty, making economic outcomes harder to predict and further weighing on investment and trade.”It added that global growth is expected to slow from 2.9% in 2025 to 2.6% in 2026, assuming the conflict does not intensify further.The report also flagged risks for energy-exporting nations, stating that “even energy-exporting countries are unlikely to see clear gains, as higher import costs and increased volatility offset additional revenues.”Shipping activity has also been impacted. “Oil and liquefied natural gas carriers, which rely heavily on Gulf routes, have been hit hardest, facing reduced volumes and higher risk costs. Other segments, such as container and dry bulk shipping, are more insulated but still affected by rising costs and disruptions,” the report noted.UNCTAD further warned that higher energy prices will increase import costs, with the impact likely to be amplified by weaker currencies.

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