UN cuts global growth forecast, blaming Middle East crisis
Summary
The United Nations has lowered its forecast for global economic growth because of the war involving Iran. It expects the global economy to grow 2.5 percent this year and 2.8 percent in 2027, down from earlier predictions, mainly due to higher energy prices and disrupted oil supplies.Key Facts
- The UN now expects global GDP growth of 2.5% in 2026 and 2.8% in 2027, down from previous forecasts of 2.7% and 2.9%.
- The growth cut is mainly due to the war that started on February 28 by the United States and Israel against Iran, affecting energy markets.
- Rising oil prices and instability in financial markets caused by the war have reduced economic growth predictions.
- The UN assumes oil prices will ease later in the year and that governments will use fuel reserves to help limit the damage.
- In a worse case, global growth could slow to 2.1%, one of the lowest rates in decades outside the COVID-19 pandemic and 2007-2009 financial crisis.
- Developing countries will be hit hardest, with growth 1.3 percentage points below pre-pandemic levels.
- Western Asia faces the biggest slowdown, with growth forecast cut from 4.1% to 1.4% in 2026.
- The Strait of Hormuz, a key oil shipping route, remains nearly closed due to safety concerns, severely limiting oil and gas supply.
- The US and China’s growth forecasts remain unchanged at 2% and 4.6%, respectively.
- The UN’s forecast downgrade follows similar cuts by the International Monetary Fund earlier in April.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.