The latest mid-2026 economic update from the United Nations (UN) shows that the global outlook remains strong, despite higher energy prices.
The UN expects world economic output to grow by 2.5% in 2026 and 2.8% in 2027. That is down from the January forecasts of 2.7% and 2.9%, pointing to still strong global expansion despite the effects of the Iran war.
For the major Western economies, the picture is also sound. The United States is forecast to grow by 2.0% in 2026, unchanged from the January forecast. The European Union is forecast to grow by 1.1% in 2026, down from 1.3% in January.
Keir Starmer’s United Kingdom is the only developed economy outlier, now forecast to grow by 0.7% in 2026, down from 1.1% – but that is largely due to how his government’s domestic policies on energy, investment, and taxation have exacerbated the Iran war effect, more than the war itself.
Developing economies remain the main engine of global growth, with just fractions of percentage points here and there shaved off their January numbers. Their collective output is now forecast to rise by 3.9% in 2026, down from 4.2% in January, before reaching 4.3% in 2027, unchanged from January. Africa is projected to grow by 3.9% in 2026, down from 4.0% in January, and 4.2% in 2027, up from 4.1%. East Asia is forecast at 4.4% in 2026, unchanged from January, and 4.4% in 2027, also unchanged from January.
South Africa is regrettably an outlier for reasons similar to those in the United Kingdom. Its growth outlook has been substantially reduced by consensus forecasts from a figure of around 1.5% in January to under 1% today. The reason relates, in the main, to the Ramaphosa government’s policies on energy, investment, black economic empowerment, and foreign policy, all of which depress investment and exacerbate the effects of global shocks.
The global figures are a useful empirical reminder that to date the broader economic effects of the Iran war have been exaggerated by legacy media companies. Stock markets, as The Common Sense has reported at length, remain well up over the past 12 months. Currencies have also proved resilient. Should the Iran war conclude, as The Common Sense now expects, ahead of the 4 July American Independence Day celebration, and oil prices come off their current highs, then the outlook for the global economy may be even stronger than the latest figures suggest.