The United Nations Trade and Development agency has forecast a significant deceleration in economic growth across developing nations. Growth in these economies is projected to slow to 4.0% in 2026, down from 4.7% the previous year, according to the organisation's latest Trade and Development Report. Global growth overall is expected to ease to 2.6%, compared with 2.9% in 2025. UNCTAD attributed the slowdown to mounting structural vulnerabilities, heightened energy shocks, and growing disparities between thriving regions and the rest of the developing world.
The slowdown masks sharp contrasts in regional performance. Asia is expected to drive 59% of global economic growth in 2026, with India projected to grow 7.3%, Vietnam 7.8%, Indonesia 5.2%, and China 4.5%. However, income convergence has stalled since the mid-2010s in other regions, UNCTAD said, leaving import-dependent nations struggling with persistent trade imbalances and limited fiscal room.
External pressures are intensifying difficulties. Regional conflicts have caused volatile crude oil and energy prices, disproportionately affecting import-dependent economies and poorer households through increased retail and transport costs. Portfolio flows have become twice as volatile, while Official Development Assistance to least-developed countries and small island developing states is projected to fall nearly 7%, marking the third consecutive annual decline.
Wealth distribution in trade remains unequal. Although global trade in goods and services is expanding by roughly 4%, developed economies capture approximately 70% of the value in strategic investments such as semiconductors and energy-transition technologies. Africa, for example, mines most of the world's cobalt but retains less than 1% of the value in clean energy supply chains, UNCTAD noted.