Global goods trade is expected to pick up gradually this year following a contraction in 2023, driven by lingering effects of high energy prices and inflation, according to a new forecast by WTO economists released on April 10.
The volume of world merchandise trade is projected to increase by 2.6% in 2024 and 3.3% in 2025 after falling 1.2% in 2023. However, regional conflicts, geopolitical tensions, and economic policy uncertainty pose substantial downside risks to the forecast.
“Inflationary pressures are expected to abate this year, allowing real incomes to grow again, particularly in advanced economies, thus providing a boost to the consumption of manufactured goods,” the report states. “We are making progress towards global trade recovery, thanks to resilient supply chains and a solid multilateral trading framework,” WTO Director-General Ngozi Okonjo-Iweala remarked.
Despite challenges, WTO Chief Economist Ralph Ossa emphasized, “The resilience of trade is also being tested by disruptions on two of the world’s main shipping routes: the Panama Canal, which is affected by freshwater shortages, and the diversion of traffic away from the Red Sea.”
The report indicates that Africa’s exports are expected to grow faster than those of any other region in 2024, followed closely by the CIS region. However, European exports are anticipated to lag behind other regions, with growth of just 1.7%.
Strong import volume growth in Asia and Africa should help prop up global demand for traded goods this year. However, all other regions are expected to see below-average import growth.
In the realm of services trade, the WTO highlighted significant growth in digitally delivered services. In 2023, global exports of digitally delivered services surpassed pre-pandemic levels, with substantial growth in Europe, Asia, Africa, and South and Central America. The newly launched Global Services Trade Data Hub provides valuable insights into services trade, catering to the diverse needs of trade negotiators, analysts, researchers, and decision-makers.
Despite the forecasted recovery, the report underscores the need to mitigate risks such as geopolitical strife and trade fragmentation to maintain economic growth and stability.
