Prospects and challenges of the global economy

The global economy in 2026 is projected to show signs of recovery after a series of disruptions, including changes in trade policy. However, the pace of global economic growth remains slow and significantly lower than pre-Covid-19 levels. The burden of debt continues to hang a shadow over many economies.

In its report “World Economic Outlook 2026,” the United Nations forecasts that the global economy will grow by 2.7% this year, lower than the estimated 2.8% in 2025 and significantly lower than the pre-pandemic average of 3.2%.

Although financial conditions have improved thanks to loose monetary policy and better consumer sentiment, high public debt and borrowing costs are narrowing policy space, especially for developing economies. Meanwhile, high prices remain a major challenge for the world .

According to Junhua Li, UN Under-Secretary-General for Economic and Social Affairs, even as inflation cools, high and continuing prices of goods and services continue to reduce the purchasing power of the most vulnerable.

Poorer countries, landlocked nations, and small island states are noted to be “remaining particularly vulnerable to debt burdens, limited policy space, and external shocks.” The situation for many developing countries is worsening as many wealthy nations have cut aid and development funding.

In fact, developing countries spend $1.4 trillion annually on debt repayments, with 61 countries having spent 10% or more of their GDP on interest payments by 2024. According to UNCTAD, global public debt reached a record high of $102 trillion in 2024, with developing countries owing $31 trillion and interest payments alone totaling $921 billion. Alarmingly, approximately 3.4 billion people, equivalent to more than 40% of the global population, live in countries where debt repayment costs exceed healthcare or education expenses.

The impacts of escalating tariff barriers, coupled with increasing macroeconomic instability, are expected to become clearer in 2026. UN Secretary-General Antonio Guterres warned that the international trading system is in jeopardy amid rising global debt, high tariffs, and increasing financial instability in developing countries. Too many countries are currently mired in debt crises.

According to the UN Secretary-General, economic, geopolitical, and technological tensions are reshaping the global economic landscape and creating new uncertainties. Many developing economies continue to face challenges, threatening progress toward achieving the Sustainable Development Goals (SDGs).

According to him, trade and development are facing a whirlwind of change, as three-quarters of global growth now comes from developing countries, trade in services is soaring, and new technologies are driving the global economy.

The United Nations is calling for increased global cooperation and international support to promote sustainable and resilient growth. The Seville Commitments, a document reached at the Fourth International Conference on Financing for Development held in Spain in 2025, are seen as a blueprint for strengthening multilateral cooperation, reforming the international financial structure, and increasing development financing.

BAO ANH

Source: https://nhandan.vn/trien-vong-va-thach-thuc-cua-kinh-te-toan-cau-post937980.html