Geopolitics, not trade, is the main global economic instability factor: UNCTAD

After years marked primarily by trade tensions and inflation, geopolitics now represents the main factor of instability for the global economy. This is according to the new report “Trade and Development Foresights 2026” from UNCTAD, the UN agency for trade and development. The premise is that the world is entering a more fragile phase, characterized by high energy prices, financial volatility, trade route tensions, and growing pressure on energy-importing economies.

The conflict in the Middle East has brought back to the center a theme already emerged with the war in Ukraine: the vulnerability of an energy system still heavily dependent on oil and gas. And the risk, the UN agency warns, is that prolonged uncertainty could turn into supply shortages, economic slowdown, and new financial tensions.

Oil and transport under pressure

According to UNCTAD, the escalation in the Middle East has already caused a sharp increase in oil prices and maritime transport costs. The combination of energy price hikes, logistical disruptions, and greater volatility is weighing on investments and global demand.

The organization forecasts that global growth will slow from 2.9% in 2025 to 2.6% in 2026. Of particular concern are the indirect effects of energy on the entire economic system: increased industrial costs, higher fertilizer prices, inflationary pressures, and greater financial instability.

Emerging economies appear to be the most exposed. Many countries are facing higher energy bills, currency devaluations, and tighter financing conditions, in a context where investors and markets tend to seek refuge in assets considered safer.

AI supports trade

Meanwhile, a significant part of global economic resilience continues to be supported by investments related to artificial intelligence. According to UNCTAD, international trade remains relatively robust thanks to demand for semiconductors, servers, and data center equipment.

But behind the AI boom, a more widespread slowdown is emerging. Outside of the technology supply chains, global trade shows much weaker signs, especially in traditional sectors and commodity-related sectors.

For 2026, UNCTAD forecasts global trade growth between 1.5% and 2.5%, compared to 4.7% recorded in 2025.

Food security, energy, and finance

One of the most critical aspects highlighted by the report concerns the increasingly close link between energy, finance, and food security.

The increase in energy prices is indeed driving up the cost of fertilizers and fueling new inflationary pressures on food products, especially in developing economies. In parallel, market volatility and worsening credit conditions are increasing the fragility of global agri-food trade.

According to UNCTAD, food security is no longer just about the availability and prices of food, but is increasingly becoming a matter of financial stability, especially for governments already struggling with high debt and reduced fiscal margins.

More renewables against shocks

However, the report also conveys a more structural message: accelerating on renewable energies is no longer just a climate issue, but increasingly a strategy for economic and energy security.

According to UNCTAD, clean technologies are becoming increasingly competitive and represent a fundamental tool for reducing exposure to fossil fuel shocks. The problem, however, remains the strong heterogeneity of investments between advanced and emerging economies.