The world economy is slowing, according to the United Nations trade and development agency UNCTAD, which says an energy shock and financial instability are putting it under strain.

The forecast

In its Trade and Development Report 2026, UNCTAD projects:

  • Global growth: 2.6% in 2026, down from 2.9% in 2025
  • Developing economies: 4% in 2026, down from 4.7%
  • Asia: about 59% of global growth

Trade in goods and services is expected to grow about 4% in real terms, but higher energy prices are inflating trade values.

AI drives trade, but not for everyone

The report found that "artificial intelligence (AI) products have become the main driver of merchandise trade", led by semiconductors and advanced computing from East Asia. UNCTAD warned that this boom does not automatically bring wider development benefits, especially to countries that do not make these products.

UNCTAD's advice

The agency urged governments to diversify energy supplies and tackle supply bottlenecks directly. It argued that this works better against today's supply-driven inflation than broad interest rate rises and spending cuts, which can choke growth.

What it means for Kenya

Slower global growth can reach Kenya through several channels:

  • Exports: weaker demand in Europe, the US and Asia can hurt sales of tea, flowers, coffee, horticulture and apparel.
  • Tourism: tighter household budgets abroad can mean fewer visitors.
  • Remittances: money sent home by Kenyans abroad, now one of the country's largest sources of foreign currency, can come under pressure when host economies slow.
  • Energy costs: the same energy shock slowing the world economy is raising Kenya's import bill.

Developing economies are still expected to grow faster than the world average, and regional trade under the African Continental Free Trade Area offers some cushion. But UNCTAD's message is that 2026 is a year to protect against shocks, especially on energy.