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Vessels ride at anchor near Khasab, a port city on the Musandam Peninsula in northern Oman, with the Strait of Hormuz in the background on May 17 (local time). / AFP·Yonhap

The United Nations has revised down its global economic growth forecast for this year and dialed up its inflation outlook to reflect the geopolitical crisis in the Middle East and the ensuing spike in oil prices, AP reported on May 19 (local time).

According to the 2026 World Economic Situation and Prospects report released by the UN Department of Economic and Social Affairs (UN DESA), the global growth forecast for this year was trimmed by 0.2 percentage points to 2.5%, down from the 2.7% projected in January. The report analyzed that growth could plummet to as low as 2.1% if international conditions deteriorate further.

"Barring the COVID-19 pandemic and the 2008 global financial crisis, this forecast represents the lowest growth rate of this century," Shantanu Mukherjee, Director of the Economic Analysis and Policy Division at UN DESA, stated during a press conference. He added, "While a recession is not imminent, life could become harder for billions of people, and some countries could experience economic contractions."

The UN projected this year's global inflation rate at 3.9%, up 0.8 percentage points from its previous estimate. This adjustment comes in the wake of Iran's blockade of the Strait of Hormuz—a vital transit route for oil and natural gas—following airstrikes by the United States and Israel.

Mukherjee pointed out that rising prices for energy, industrial production, and refined products essential for commercial transit are the primary drivers stoking inflation.

The inflation outlook varied by region, with the inflation rate for developed economies projected to rise from 2.6% in 2025 to 2.9% in 2026. For developing nations, inflation is forecast to climb from 4.2% to 5.2% due to soaring energy and transit costs, as well as higher prices for imported goods.

Looking at growth projections for major economies and regions, the United States is expected to log 2.0%, remaining close to last year's level. The European Union (EU) is forecast to slow from 1.5% last year to 1.1% this year, weighed down by its heavy reliance on imports.

China's economy is anticipated to witness a moderate slowdown from 5.0% last year to 4.6% this year, cushioned by buffers such as energy diversification and strategic stockpiles. India, while pacing below last year's 7.5%, is projected to record 6.4% growth this year, maintaining the fastest rate among major economies.

"There are limits to the economic buffers held by major countries like China and India," noted Ingo Pitterle, a senior UN economist. "The future trajectory of the global economy will ultimately depend on how long the conflict persists."