- Global trade to shrink by 5% in 2023, according to the United Nations Conference on Trade and Development
- Trade in goods is expected to contract by 8% but the services trade should increase by 7%
- The expected contraction in global trade is due to underperformance of exports from developing countries
- The 2024 forecast for global trade remains “highly uncertain and generally pessimistic”
Global trade is set to contract by 5% in 2023 and faces an equally gloomy 2024, the United Nations Conference on Trade and Development (UNCTAD) said.
The organization’s Global Trade Update, released on December 11, predicted an 8% drop of nearly $2 trillion in the trade of goods in 2023. The services trade, however, is anticipated to grow by 7% or about $500 billion.
The global commerce for this year is forecast at $30.7 trillion.
The report noted that exports from developing countries performed below expectations, South-South trade sharply declined, and East Asian trade remained subpar.
“Global trade has experienced a decline throughout 2023, primarily influenced by diminished demand in developed nations, underperformance in East Asia economies, and a decrease in commodity prices,” UNCTAD said.
“These factors collectively contributed to a notable contraction in the trade of goods,” it added.
The organization noted that the outlook for global trade in 2024 is “highly uncertain and generally pessimistic.”
Geopolitical trends, including the declining interdependence between China and the United States, are increasingly impacting global trade, according to the report.
“While certain economic indicators hint at potential improvements, persistent geopolitical tensions, high levels of debt, and widespread economic fragility are anticipated to exert negative influences on global trade patterns,” it said.
READ: Global trade turns from record growth to negative in 2H: UNCTAD
