(MENAFN) The United Nations has warned that the ongoing Middle East crisis is weighing heavily on the global economy, reducing growth forecasts and contributing to renewed inflationary pressures, according to a new report.

In its “World Economic Situation and Prospects as of mid-2026” assessment, the UN’s Department of Economic and Social Affairs said global economic momentum has weakened significantly due to recent shocks linked to regional instability.

The report projects global GDP growth at 2.5% in 2026, a downward revision of 0.2 percentage points from earlier estimates and well below pre-pandemic averages. A slight rebound is expected in 2027, with growth forecast at 2.8%.

It explained that the main pressure point comes from the energy sector, where supply constraints, rising prices, and higher freight and insurance costs are feeding through global supply chains and increasing production expenses across industries.

Western Asia has been identified as the most affected region, with growth expected to fall sharply from 3.6% in 2025 to 1.4% in 2026, driven by disruptions to oil production, trade flows, tourism, and infrastructure damage.

The report also highlighted uneven global impacts. The United States is expected to remain relatively stable with growth around 2.0%, while the European Union is projected to slow from 1.5% to 1.1%. China and India are also expected to moderate, though they continue to outperform many other major economies.

Overall, the UN warned that the combined effects of geopolitical tensions and energy market disruptions are creating a broader drag on global recovery and stability.

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