WTO Warns Global Trade Growth to Slow in 2026 Amid Middle East Conflict and Energy Risks

The WTO’s warning underscores the need for resilient supply chains and coordinated global responses to navigate an increasingly uncertain trade environment.

Global trade growth is expected to slow in 2026 after a stronger-than-anticipated rebound in 2025, driven largely by a surge in demand for AI-related technologies, according to economists at the World Trade Organization (WTO).

However, rising geopolitical tensions—particularly the ongoing conflict in the Middle East—are emerging as a key downside risk that could further dampen trade momentum.

AI Boom Fuels Strong 2025 Performance

Trade in 2025 exceeded expectations, supported by rapid expansion in sectors linked to artificial intelligence, including:

• Semiconductors and advanced chips

• Data infrastructure and computing hardware

• AI-enabled digital services

This surge has temporarily offset broader economic uncertainties, helping sustain global trade flows.

2026 Outlook: Slower Growth Ahead

Despite the strong 2025 performance, WTO economists project a moderation in trade growth in 2026, reflecting:

• Cooling demand after the AI-driven surge

• Persistent global economic uncertainty

• Rising geopolitical risks

The outlook remains fragile, with external shocks likely to play a decisive role.

Middle East Conflict Poses Major Risk

A key concern is the ongoing conflict in the Middle East, which could significantly disrupt global trade if it escalates or persists.

WTO economists warn that:

• Higher energy prices could increase production and transport costs

• Food supply chains may come under pressure due to rising input costs

• Services trade, particularly travel and transport, could be disrupted

Such impacts would have ripple effects across both developed and developing economies.

Energy and Food Security Concerns

Elevated oil and gas prices could:

• Raise inflation globally

• Reduce consumer demand

• Increase costs for industries reliant on energy and logistics

At the same time, disruptions in transport routes could affect agricultural exports and food availability, especially in vulnerable regions.

Upside Scenario Still Possible

Despite the risks, the WTO notes that prospects could improve under more favourable conditions:

• A quick resolution of the Middle East conflict

• Continued strong investment in AI and digital infrastructure

• Stabilisation of energy markets

If these factors align, global trade could regain momentum sooner than expected.

A Delicate Balance for Global Trade

The current outlook reflects a two-speed dynamic:

• Strong growth in high-tech sectors, particularly AI

• Weakness and uncertainty in traditional trade sectors due to geopolitical tensions

This divergence highlights the increasing role of technology-driven trade in shaping global economic trends.

A Critical Year Ahead

As 2026 approaches, global trade will depend heavily on:

• Geopolitical stability

• Energy market dynamics

• Sustained innovation and investment in emerging technologies

The WTO’s warning underscores the need for resilient supply chains and coordinated global responses to navigate an increasingly uncertain trade environment.