The World Economic Situation and Prospects report said while a sharp increase in US tariffs in 2025 created new trade tensions, the absence of broader escalation has helped limit disruptions to international commerce.
"Despite the tariff shock, global economic activity proved resilient, supported by front-loaded shipments, inventory accumulation, and solid consumer spending amid monetary easing and broadly stable labour markets," according to the report released on Thursday by the UN Department of Economic and Social Affairs.
"Continued macroeconomic policy support is expected to cushion the impact of higher tariffs, but growth in trade and overall activity are likely to moderate in the near term," it said.
The report said economic growth in the United States slowed to 1.9 per cent in 2025 - from 2.8 per cent in 2024 - and was forecast to edge up to 2.0 per cent in 2026 and 2.2 per cent in 2027, aided by expansionary fiscal and monetary policies.
It said inflation would likely remain above the two per cent target in 2026, "though it should gradually moderate as tariff effects wane and housing costs stabilise".
In China, the economy was projected to grow by 4.6 per cent in 2026 and 4.5 per cent in 2027, down from an estimated 4.9 per cent expansion in 2025.
"A temporary easing of trade tensions with the United States - including targeted tariff reductions and a one-year trade truce - has helped stabilise confidence, while policy support is expected to sustain domestic demand," the report said.
Growth in the European Union was forecast at 1.3 per cent in 2026 and 1.6 per cent in 2027 - compared with 1.5 per cent in 2025 - driven by resilient consumer spending. But higher US tariffs and geopolitical uncertainty are likely to weigh on exports, the report said.
It said growth in South Asia was due to moderate to 5.6 per cent in 2026, from 5.9 per cent in 2025. It was forecast to return to 5.9 per cent in 2027.
"India, growth is estimated at 7.4 per cent for 2025 and forecast at 6.6 per cent for 2026 and 6.7 per cent for 2027, supported by resilient consumption and strong public investment, which should largely offset the adverse impact of higher United States tariffs," the report said.
