ISLAMABAD: Global economic growth is projected to slow to 2.6 per cent in 2026 and 2.7pc in 2027, from 2.9pc in 2025, while growth in developing economies is expected to fall to 4pc from 4.7pc, amid mounting technological and policy barriers, according to the Trade and Development Report 2026.

The flagship report by the United Nations Conference on Trade and Development (UNCTAD) finds that governments increasingly use industrial, trade, financial, and technology policies to pursue economic and national security objectives. Access to markets and the ability to move into higher-value activities now depend more heavily on technology, finance and geopolitics.

Developing countries will be affected unevenly by the reconfiguration of global trade. Some may emerge as alternative suppliers or intermediary hubs, but sustaining these gains will require stronger productive, regulatory and institutional capabilities, the report warns.

Global trade reached a record $35 trillion in 2025. Higher trade values in 2026 are being driven by rising prices amid the energy shock. Trade patterns are also shifting, with trade between China and the United States falling by more than 20pc since 2024, while East Asia has expanded trade with both China and North America. Export controls, investment screening and supply-chain conditions are making it harder for new entrants to access strategic sectors.

Asia remains the most dynamic exporting region, with intra-Asian merchandise trade rising markedly. South-South trade is also deepening as China and other major Asian exporters increase shipments to emerging markets.

On the import side, Asia is expected to record the strongest growth in 2026, followed by North America, where demand for artificial intelligence-related goods has supported overall imports.

Published in Dawn, October 11th, 2026