- UNCTAD said global trade in goods and services turned positive in Q1 2024
- The value of trade in goods increased by around 1% compared to the previous quarter, while services grew by about 1.5%
- Trade growth in developing countries and South-South trade outpaced that in developed countries
- Global trade growth was driven by increased exports from China, India, and the United States
- Green energy and AI-related products experienced increased demand
- Geopolitical tensions and policy challenges remain potential obstacles to sustained growth in global trade
Global trade trends turned positive in the first quarter of 2024, with the value of trade in goods increasing by around 1% compared to the previous quarter, and services by about 1.5%, the United Nations Conference on Trade and Development said.
The UNCTAD’s “Global Trade Update” report for July 2024 said the positive trend for international trade in Q1 was largely due to trade growth in developing countries and South-South trade outpacing that in developed countries; increased exports from China, India, and the United States; and increased demand for green energy and AI-related products.
“This surge, fueled by positive trade dynamics for the United States and developing countries, particularly large Asian developing economies, is expected to add approximately $250 billion to goods trade and $100 billion to services trade in the first half of 2024 compared to the second half of 2023,” the report said.
International trade in Q1 2024 was primarily driven by increased exports from China (9%), India (7%) and the U.S. (3%).
Additionally, trade in developing countries and South-South trade both experienced a positive trajectory with around a 2% increase in both imports and exports. In comparison, developed countries saw flat imports and a modest 1% rise in exports.
Sector-wise, green energy and AI-related products experienced increased demand, especially for high-performance servers, electric vehicles, and other computer and storage units.
However, UNCTAD maintained a positive outlook yet “cautiously optimistic” in the short term, citing geopolitical and policy challenges.
“Global forecasts for GDP growth remain at around 3% for 2024, with the short-term trade outlook being cautiously optimistic. If positive trends persist, global trade in 2024 could reach almost $32 trillion, yet it is unlikely to surpass its record level seen in 2022,” the report said.
The report cited geopolitical tensions, rising shipping costs, and emerging industrial policies, as well as an increasing focus on domestic industries and trade restrictions could hinder international trade growth.
READ: UNCTAD’s global trade update shows positive signs despite challenges
