Muscat: Geopolitical risks have become the primary source of instability facing the global economy, the UN Conference on Trade and Development warned, forecasting a slowdown in global growth from 2.9 percent in 2025 to 2.6 percent in 2026.

According to Oman News Agency, in a report titled 'Trade and Development Outlook 2026: A Global Economy Under Geopolitical Challenge,' UNCTAD said the world economy is under mounting pressure from rising energy prices, transport disruptions, market volatility and increased demand for safe-haven assets.

Developing economies are the most affected by these risks, the report said, due to rising fuel, food and fertiliser costs, currency pressures, tighter financing conditions and weakening investor confidence.

Global trade in goods remained relatively resilient early in 2026, driven mainly by AI-related products, while growth in traditional and commodity-based sectors remained limited.

UNCTAD also warned of mounting pressure on global food systems from higher energy and fertiliser costs, increasing food inflation and adding to challenges for governments already facing high debt service costs.

The organisation called for stronger international cooperation, improved trade conditions, greater financial guarantees for developing economies, and accelerated investment in affordable clean energy to support stable global growth and mitigate future shocks.