Asia set to drive nearly 60% of global growth as world economy cools

The United Nations Conference on Trade and Development has projected global economic growth will decelerate to 2.6% in 2026, down from an expected 2.9% in 2025, as the world economy navigates persistent headwinds including geopolitical tensions, energy market volatility and widening development disparities across nations.

Despite the broader slowdown in global activity, Asia is positioned to remain the primary engine of worldwide expansion, contributing nearly three-fifths of total growth over the forecast period. India is set to emerge as one of the region's standout performers, maintaining a solid growth trajectory of 7.3% in 2026, underscoring its continued economic momentum even as other major economies face mounting pressures.

The moderating growth outlook reflects deepening structural challenges confronting the global economy. Escalating geopolitical tensions continue to disrupt trade flows and investment patterns, while energy market shocks threaten to undermine economic stability. At the same time, the widening gap between developed and developing nations poses risks to sustainable expansion and threatens to exacerbate existing inequalities.

The projections highlight Asia's critical importance to the global economic outlook, with emerging markets in the region cushioning the impact of slower growth in developed economies. India's sustained expansion reflects strong domestic demand, demographic tailwinds and structural economic reforms that continue to attract investment and drive productivity gains across sectors.