Original Source
UN Warns 'Iran War' to Slow Global Growth, Reignite Inflation
Global Economic Growth Forecast Downgraded
The United Nations warned on Tuesday that the 'Iran War' is delivering a fresh blow to the global economy, cutting growth prospects and reigniting inflationary pressures, threatening hard-won gains across developing countries. A senior official from the UN Department of Economic and Social Affairs (DESA), presenting a mid-year update of the World Economic Situation and Prospects report for 2026 at UN Headquarters in New York, stated that the conflict's impact extends beyond energy markets, creating broad supply shocks affecting trade, finance, and food security.
Shantanu Mukherjee, Director of DESA's Economic Analysis and Policy Division, noted that what began as a hit to energy markets on February 28 has morphed into broader supply shocks of uncertain scope, scale, and duration. The UN now projects global economic growth for 2026 at 2.5%, a downward revision from previous forecasts, with a modest recovery to 2.8% in 2027. Officials cautioned that the outlook remains highly uncertain and could worsen further if disruptions in energy markets persist.
Inflationary Pressures Reignite, Threatening Developing Nations
Under a more severe scenario compiled by the UN, global growth could decelerate to just 2.1% in 2026, marking one of the slowest growth rates this century, excluding the COVID-19 pandemic and the global financial crisis. This is projected to be 1.3 percentage points below the pre-pandemic average. The crisis has also reversed the trend of global disinflation that had been underway since 2023. Worldwide inflation is now forecast to rise to 3.9% this year, an increase of 0.8 percentage points from the January forecast.
The most rapid increases are anticipated in South Asia and Asia, primarily driven by rising energy and transport costs. These economic pressures are poised to exacerbate challenges across developing nations, potentially undermining existing development efforts.
*Source: arabnews.jp (2026-05-20)*
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