Global trade witnessed a 3 per cent contraction last year.

Logistical challenges like shipping disruptions in the Red Sea, Black Sea and Panama Canal cast shadows over the optimistic outlook, and can raise costs and disrupt supply chains, UNCTAD cautioned in its Global Trade Update report.

However, there has been an increasing demand for container shipping during the last few months. Some East Asian and Latin America economies may find opportunities this year to become more integrated into the supply chains affected by geopolitical concerns, the UNCTAD report noted.

The prioritisation of domestic concerns and the urgency of meeting climate commitments are driving changes in both industrial and trade policies. The utilisation of trade restrictive measures and inward-looking industrial policies are anticipated to affect the growth of international trade, it said.

“Projections for 2024 are more optimistic. Overall, moderating global inflation and improving economic growth forecasts suggest a reversal of the downward trends. Additionally, rising demand for environmental goods should boost trade in 2024. However, it’s important to note that the global trade outlook for 2024 remains subject to significant uncertainties,” the report said.

Major economies, except Russia, experienced a generalised downturn in merchandise trade last year. Trade in goods dipped by 5 per cent last year compared to 2022. Russia saw a sharp decline in export levels in 2023, largely tied to energy markets.

Quarter-on-quarter figures indicate a return to growth in some major economies, including China and India.

India’s merchandise exports grew by 5 per cent Year on year (YoY) in 2023 last quarter. However, on an annual basis, export growth in the country witnessed a 6 per cent contraction.

Fibre2Fashion News Desk (DS)