World Bank Expects 2026 Global GDP Growth at 2.6%

The United Nations (UN) on Tuesday cut its forecast for global economic growth to 2.5% in 2026, compared with an estimated 3.0% in 2025, marking a downgrade of 0.2 percentage points from its January projection and remaining well below pre-pandemic growth rates due to inflationary pressures amid the Middle East conflict. In a U.N. press release summarizing the mid-year update to the global body's World Economic Situation and Prospects, the agency said solid labor markets, resilient consumer demand, and AI-driven trade and investment are expected to provide support, though the downgrade underscores further weakness in the already subdued global outlook. The surge in energy prices has delivered windfall gains for energy companies but intensified cost pressures for households and businesses. The US economy is expected to remain comparatively resilient, with growth projected at 2.0% in 2026, supported by strong household demand and continued investment in technology.

U.S. President Donald Trump announced plans to raise tariffs on European Union cars and trucks to 25% this week, up from 15%, citing alleged non-compliance with Washington’s trade deal. In a social media post, Trump said EU-made vehicles would face higher duties unless produced in U.S. plants, adding the move would accelerate European carmakers’ shift to domestic production. He told reporters the measure was intended to pressure manufacturers to localize output. The European Commission swiftly rejected Trump’s claim, insisting Brussels was honoring last summer’s agreement and warning it would defend EU interests if Washington breached the deal. The escalation marks a fresh strain in transatlantic trade ties, raising risks for automakers and fueling uncertainty over the durability of the pact.

President Trump on Sunday issued a renewed ultimatum to Iran, threatening to attack civilian infrastructure inside Iran if it did not open the Strait of Hormuz, a major transit route for a fifth of the world’s oil and gas. Trump made the threat in an expletive-laden social media post on Sunday, in which he repeated previous threats to critical infrastructure across Iran, including bridges and power plants. “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!” Mr. Trump wrote on social media. “Open the fuckin’ Strait, you crazy bastards, or you’ll be living in Hell — JUST WATCH.” The announcement followed the rescue of an injured airman by U.S. forces after his fighter jet was shot down over the country on Friday. Meanwhile, Iran’s top military commander warned that “the gates of Hell would be opened” if the U.S. and Israel proceeded with attacks against the Islamic Republic’s energy infrastructure.